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Growing Together Annual Report 2020 Krungthai is ready to grow along with you in the Digital era. With world-class technology, we shall push the limits to enable our customers, employees, shareholders and all Thai people to completely enter a cashless-society and have better quality of life. Pillar Pillar Seek for alliances to create new business models, Sustain core business of the Bank (Carrier) to run ﬁrmly generate new sources of income and respond to the Next Normal era as well as grow cautiously and sustainably

EXECUTION Pillar PILLARS Expand business from the Bank’s customers To cope with the ongoing impact of the Perfect Storm, the Bank (X2G2X) Pillar continues to drive the 2 Banking Models strategy with the 5 Execution Pillars. Operate business on transparency and sustainability according to the vision of “Growing Together for Sustainability”

Pillar Optimize work processes towards Digitization with paperless Pillar Seek for alliances to create new business models, generate new sources of income and respond to the Next Normal era

EXECUTION Pillar PILLARS Expand business from the Bank’s customers To cope with the ongoing impact of the Perfect Storm, the Bank (X2G2X) continues to drive the 2 Banking Models strategy with the 5 Execution Pillars.

Pillar Optimize work processes towards Digitization with paperless 19 Awards of Pride Bank of Thai people for Thai economy and Thai society to grow sustainably.

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The Asian Banker TMA State Enterprise Policy Office (SEPO) Siamrath 1. Leadership Achievement Award for 5. Thailand Corporate Excellence Award 2020 10. Outstanding Board of Director Awards 2020 16. Popular State Bank of Technology Best Managed Bank during COVID-19 in Thailand The Bank is an organization with excellence in 11. Outstanding Corporate Management Awards 2020 and Innovation Award 2. Best CEO Response to COVID-19 in Thailand Award terms of corporate management in various fields. 12. Outstanding COVID-19 Crisis Management Awards 2020 The Bank received online voting as The Bank has outstanding administration 6. Thailand Digital Excellence Award 2020 The Bank exhibited the good cooperate governance, the organization that truly gained popularity in all aspects during COVID-19 pandemic. The Bank established Krungthai Innovation Lab as a center operated business effectively and performed outstanding in social media. for innovation and high technology, endeavoring to lay management during the COVID-19 pandemic. The Banker the foundation for innovative financial services. Money and Banking 3. Bank of the Year 2020 in Thailand Award The Stock Exchange of Thailand 17. Financier of the Year Award 2020 The Bank is a state commercial bank with LINE Thailand 13. SET Awards 2020 - Thailand Sustainability Investment distinctive management in all dimensions. 7. Best Smart Channel in Finance & Insurance Award: (THSI) Award Thaipat Institute Krungthai Care The Bank is a listed company that operated its business 18. Sustainability Disclosure Award 2020 CFI 8. Best Official Account of the Year Award: Krungthai Connext with regard to the environment, society 4. Best Social Impact Bank - Thailand 2020 Award The Bank has provided the full-fledged financial services. and good corporate governance. Bangkokbiz The Bank is a state commercial bank that played 19. Business Person of the Year 2020 an important role in steering the nation’s economy Thai ESCO Association Business+ 9. ESCO Excellent Financial Supporting Award 14. Thailand Top Company Awards 2020 – Financial Industry The Bank is the leading financial institution that 15. Product of the Year Awards 2020 – Krungthai NEXT supported the energy service companies business. The Bank had excellent performance and won the award trough the consumer survey voting via online media as the best product and services of the year. 19 Awards of Pride Bank of Thai people for Thai economy and Thai society to grow sustainably.

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Krungthai NEXT provides you convenience with AI features: New version, more pleasure to use, quick interaction and fulﬁllment of all your needs. Easy and convenient online transactions in just one app. Live Your Life Smarter in Just One App

001 036 120 188 Financial Highlights Business Environment Risk Factors Report of the Audit Committee

002 040 130 190 Message from Policy and Business Internal Control and The Board of Directors’ the Chairman Overview Risk Management Responsibility for Financial Reports

004 052 137 191 Message from Business Operation Report of Independent Independent the President Director Committee Auditor’s Report

007 064 139 196 Statement of Direction, Management Analysis and Report of the Corporate Financial Statements Vision and Mission Discussion Governance and Social Responsibility Committee

008 085 140 204 Organization Chart Shareholding and Report of the Nominating Table of contents Management Structure and Remuneration for Notes to the Financial Committee Statements

010 113 141 205 The Board of Directors Report of the Board of Corporate Governance Notes to the Financial Executive Directors Statements

014 116 179 348 The Executive Officers Report of the Compliance Related–Party General Information Committee Transactions and Other Major Information

019 118 184 357 Brief Biography of Board Report of the Risk Corporate Social Banking Network of Directors and Executive Oversight Committee Responsibility Officers Annual Report 2020 001

Financial Highlights

Loans Net BIS Total (Less Deferred Revenue) Interest Income Capital Ratio

2020 2020 2020 2,334,842 88,343 19.11% million baht million baht

2019 2019 2019 2,089,873 88,316 19.01% million baht million baht 2019 2020 2019 2020 2019 2020

Consolidated Krungthai Bank

2020 2019 2018 2017 2016 2020 2019 2018 2017 2016 (Restated) (Restated) Financial Standing (Million Baht) Loans 2,334,842 2,089,873 2,024,205 1,938,082 1,904,089 2,252,022 2,006,313 1,948,702 1,865,396 1,837,120 (Less Deferred Revenue) Allowance for expected credit loss 150,528 135,228 133,755 125,381 110,782 140,590 126,732 125,340 116,743 102,922 / Allowance for Doubtful Accounts (Including Revaluation Allowance for Debt Restructuring) NPLs 107,138 102,659 106,370 103,020 91,128 103,254 99,224 102,634 98,637 86,786 Total Assets 3,327,780 3,012,216 2,739,203 2,854,210 2,689,703 3,226,987 2,908,358 2,656,181 2,771,583 2,614,798 Total Deposits 2,463,225 2,155,865 2,039,602 2,070,875 1,972,404 2,466,780 2,158,460 2,042,948 2,073,594 1,975,158 Total Liabilities 2,972,717 2,663,890 2,425,062 2,559,991 2,410,299 2,918,012 2,604,135 2,368,676 2,501,454 2,354,343 Total Equity 355,063 348,326 314,141 294,219 279,404 308,975 304,223 287,505 270,129 260,455 Total Equity 343,466 338,287 305,875 287,861 274,187 308,975 304,223 287,505 270,129 260,455 (Equity Holders of the Bank) Operating Performance (Million Baht) Interest Income 112,837 122,971 119,770 122,886 129,230 97,894 108,320 105,937 109,374 116,257 Interest Expense 24,494 34,655 36,081 36,023 42,264 22,996 33,161 34,561 34,426 40,784 Net Interest Income 88,343 88,316 83,689 86,863 86,966 74,898 75,159 71,376 74,948 75,473 Non-Interest Income 33,905 37,342 33,532 36,361 37,722 26,567 29,726 25,833 30,475 31,463 Other Operating Expense 53,465 62,474 53,088 49,483 50,631 46,961 55,477 46,305 42,791 43,693 Net Profit 19,439 32,138 31,089 24,110 33,565 13,292 26,326 25,101 21,312 29,968 Net Profit 16,732 29,284 28,491 22,440 32,304 13,292 26,326 25,101 21,312 29,968 (Equity Holders of the Bank) Financial Ratios (%) Return on Average Assets 0.53 1.02 1.02 0.81 1.17 0.43 0.95 0.92 0.79 1.12 (Equity Holders of the Bank) Return on Average Assets 4.91 9.09 9.60 7.99 12.42 4.34 8.90 9.00 8.03 12.11 (Equity Holders of the Bank) NPL / Loans 3.81 4.33 4.53 4.19 3.97 3.79 4.33 4.52 4.14 3.89 BIS Total Capital Ratio * 19.11 19.01 18.22 17.15 16.60 18.76 18.66 18.19 17.45 16.85 Book Value per Share (Baht) 25.40 24.91 22.47 21.04 19.98 22.10 21.76 20.56 19.32 18.63

* For 2020, 2019, 2018, 2017 and 2016, consolidated financial statements are financial business groups’ s figures. Note : The Bank restated the 2017 financial statements audited by the auditor in order to be comparable with the 2018 financial statements and notes. 002

Message from the Chairman Annual Report 2020 003

Krungthai Bank, has played an important role in pushing forward measures from both the government sector and the Bank of Thailand.

2020 marked the year that Thai economy has been severely also inspired them to open up for knowledge and skills affected by both internal and external environment factors, development that can support for the Great Reset – the change in particular the COVID-19 outbreak. Thus, the government of economic landscape and business practices in the near future, needed to expedite various measures i.e., public health measures, which focuses more on operations with consideration towards remedial and compensation measures for persons affected by the impact on economy, society, environment and corporate COVID-19 pandemic, including social and economic recovery governance. This will enable Krungthai Bank to enter the digital measures. Likewise, for the financial sector, the Bank of Thailand economy era effectively and become the country’s leading in collaboration with financial institutions, has implemented commercial bank that can fully respond to the needs of all liquidity enhancing measures to support borrowers in diverse groups. stakeholders, comprising taking care and developing potential of personnel; continuously delivering valuable services and advice Krungthai Bank, as an economic pillar, has played an to customers; joining in the sustainable development of the important role in pushing forward such measures from both economy, society and environment, including sustainably creating the government sector and the Bank of Thailand. For example, good returns to shareholders. Consequently, we shall do our best the Bank launched credit measures to continuously assist borrowers to align with the Bank’s vision of “Growing Together for affected by COVID-19 pandemic whereas especially building Sustainability”. platforms for the government’s schemes and measures such as the “Chim-Shop-Chai” [Taste-Shop-Spend] scheme, the “Rao On behalf of the Board of Directors, executives, employees Mai Ting Kan” [No one will be left behind] campaign, the “Rao and subsidiaries of the Bank, I would like to express thanks to Tiew Duay Kan” [We travel together] scheme and the “Khon La shareholders, business partners and customers from the private Khrueng” [Let’s go halves] scheme. The achievements from all and public sector for always giving trust and confidence to schemes are the pride of our Krungthai Bank since we have Krungthai Bank. I sincerely hope that you will always support united as part of major driving forces behind the overall economic the Bank continuously for all time. recovery of the country. Besides, we have committed ourselves to conduct business within the “Krungthai Moral” framework. In details, the Bank cultivated and encouraged executives and employees to have Mr. Krisada Chinavicharana integrity, honesty, transparency and accountability. The Bank Chairman of the Board of Directors 004

Message from the President Annual Report 2020 005

The Bank has regarding the digital development and internal infrastructure restructuring. As a result, it has helped to mitigate impacts of the Perfect Storm at a certain level.

In 2020, Thailand has faced with many challenges. acting as the rights protector for the “Rao Mai Ting Kan” [No One Apart from the existing challenges from unfavorable economic Will Be Left Behind] scheme, since this project can provide structures such as high household debt and the growing of assistance and remedies for 15.3 million Thai people. We also aging society, there were new challenges, especially Digital joined in “Rao Tiew Duay Kan” [We Travel Together] campaign Disruption and the spread of COVID-19 outbreak. Therefore, that generated cash flow in the economy up to 20,000 million the Thai economy seemed to undergo a huge historic storm Baht throughout the campaign. Meanwhile, “Khon La Khrueng” that we have never encountered before or the Perfect Storm, [Let’s Go Halves] scheme was not only contributed to the which created uncertainty and severe impacts on all sectors, economic recovery at the foundation level, but it also helped including the operations of commercial banks. to educate people on how to use technology (Digital Literacy) through using the Bank’s applications: “Pao Tang” and “Thung Krungthai Bank has accelerated the implementation of Ngern”. Due to the continuous support for government schemes, measures, both in cooperation with the Bank of Thailand and finally, the Bank can currently serve customers and Thai people those undertaken by the Bank, in order to mitigate the impact of more than 40 million users. on customers. More importantly, the Bank has hastily continued the integrated plans regarding the digital development and Besides, the Bank has continually endeavored to innovate internal infrastructure restructuring simultaneously during and develop digital financial products/services in line with the the past 3 - 4 years. For example, the rebalancing portfolio rapidly changing of customer behavior in an attempt to increase was properly adjusted and the coverage ratio was set at its competitiveness. In particular, the new Krungthai NEXT an appropriate level, whereas the proportion of non-performing application was developed with world-class technology debt was under control. Furthermore, the Bank also executed and added with features that can support future financial the technology to help increase efficiency in work processes. activities. For Pao Tang, which is an open banking application, As a result, it has helped to mitigate such impacts at a certain it is capable to support several digital services such as level. In the meantime, the Bank still carried out a parallel healthcare services via Health Wallet and Thailand’s first digital strategy or 2 Banking Models – Carrier and Speedboat – bond trading via Wallet SBM. Additionally, Thung Ngern, concurrently to align with the context of extremely abrupt and which is convenient for receiving payment, can serve as severe disruption. The Carrier focused on operating key business a replacement for the traditional EDC machines, whereas of the Bank and Speedboat aimed at creating new business the Bank also invented a method of payment by using an ID card models as well as building platforms that can connect to other and implemented for the first time in Thailand. Consequently, platforms in an open banking system. from our commitment to progress in various fields, in 2020 many works and success of the Bank have been recognized by many Another important integration was placed on the response sectors as well as enabled the Bank to receive considerable to the government missions in parallel with the business numbers of national and international awards correspondingly. management missions. Recently, the Bank supported the government in advocating the Thailand 4.0 policy through In 2021, the Bank still continue to place importance on the development of a digital platform for people in all sectors driving the 2 Banking Models strategy with the 5 Execution to have access to the financial services. After the economy Pillars so as to cope with the ongoing impact of the Perfect has been affected by the COVID-19 outbreak, Krungthai Bank Storm and the New Normal lifestyles. To be precise, 1. Sustain attained the pride in taking part to develop the platform and core business of the Bank (Carrier) to run firmly as well as grow 006

cautiously and sustainably: The Bank shall emphasis on the close monitor of quality credit along with supporting the individual customers and entrepreneurs to be able to adapt and go through this difficult period as much as possible 01 Sustain core business of in order to reduce the risk of non-performing receivables. the Bank (Carrier) to run Thus, along with risk management in all dimensions, the Bank firmly as well as grow also prepares to manage bad debt and extends business from cautiously and sustainably the existing customers through finding opportunities to perform cross sell. Then, 2. Seek for alliances to create new business models, generate new sources of income and respond to 02 the Next Normal era: During the past year, the Bank established Seek for alliances to create new business models, Infinitas by Krungthai Company Limited to do research and generate new sources of income and respond to develop new digital financial products through the concept the Next Normal era of Open Ecosystem. 3. Optimize work processes towards Digitization with paperless: The Bank will implement RPA or Robotic Process Automation and artificial intelligence (AI) to improve work processes and reduce the cost of services. 03 4. Expand business from the Bank’s customers ( X2G2X): By taking Optimize work processes towards Digitization the government sector as center, the Bank shall connect together with paperless with business partners and retail customers, especially within the Bank’s 5 target Ecosystems. Finally, 5. Operate business on transparency and sustainability according to the vision of “Growing Together for Sustainability”: The Bank adheres to the principles of corporate governance while building up a zero- 04 Expand business from tolerance culture. In addition, we take into account the business the Bank’s customers operation with the principles of ESG ( Environment, Social and (X2G2X) Governance) that support the implementation of various activities or projects to take care of Thai people, economy, society and environment such as Krungthai Loves Community 05 project, UNDP- Krungthai ‘Koh Tao, Better Together’ project Operate business on and etc. transparency and sustainability according to the vision of “Growing Together for I strongly believe that driving of 2 Banking Models strategy Sustainability” with the 5 Execution Pillars together will enable Krungthai Bank to maintain its role as the leading commercial bank with good asset quality and stable performance. The Bank engages in steering Thailand towards a cashless-society according to the Thailand 4.0 policy while adjusting itself well in the direction of shifting to the future world. Beyond the reduction on the inequality of the financial access of Thai citizens and Thai entrepreneurs, the Bank shall strengthen its digital banking competitiveness and enhance the public trust respectively. As a result, according to the various aforementioned Mr. Payong Srivanich operations, Krungthai Bank shall be able to grow alongside President with Thai people steadily and sustainably. Annual Report 2020 007

Statement of Direction, Vision and Mission

Krungthai Bank is a financial institution for development, where we help create opportunity for people to gain access to sources of fund as well as provide them with financial literacy in order to strengthen the economy’s foundation. By applying technology and innovation to manage and provide financial services, we also aim to improve the competitiveness of the country while trying to mitigate social inequality under a stable, transparent and sustainable management of the organization.

Growing Together for Sustainability – enhance capabilities of employees to support growth and prosperity for customers, enrich quality of society and environment, as well as provide sustainable return for our shareholders

Develop Provide customers Fulfill our Provide capabilities of with differentiated responsibilities to shareholders with personnel and and value added society through superior and work system service and advice supporting sustainable return sustainable economic, social and environmental development 008

Organization Chart As at February 1, 2021

Board of Directors

The Corporate Governance & Nominating & Board of Executive Social Responsibility Remuneration Committee Directors Committee

President

Global Business Development Digital Solutions Group and Strategy Group

Retail Banking Sales & Wholesale Banking Financial Management Group Distribution Group

Retail Banking Product & Communication and Corporate Banking Group 1 Strategy Group Branding Group

Retail Shared Corporate Banking Group 2 Business Center Group Services Group

Krungthai Credit-Related Business Capital Market Business Insurance Business Support Business Group

KTB Leasing Krung Thai IBJ Krungthai Card KTC NANO KTC PREPAID Krung Thai Asset KTB Advisory Krungthai-AXA KTB General Services KTB computer services Co., Ltd. Leasing Co., Ltd. Pcl. Co., Ltd. Co., Ltd. Management Pcl. Co., Ltd. Life Insurance Pcl. and Security Co., Ltd. co. ltd

KTC Pico KTC Pico KTC Pico KTC Pico KTC Pico Krungthai ZMICO Securities Co., Ltd. Krungthai Panich KTB Law Co., Ltd. Inﬁnitas by krungthai (Bangkok) (Chonburi) (Pathum Thani) (Samut Prakan) (Samut Sakhon) (formerly KT ZMICO Securities Co., Ltd.) Insurance Pcl. co. ltd Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Annual Report 2020 009

Risk Oversight Audit Committee Compliance Committee Committee

Complianceสายงานก�ำกับกฎเกณฑ์ and Legal Internal Audit Group Managementและกฎหมาย Group

Operation Group Risk Management Group Global Markets Group

Creditสายงานปรับโครงสร้างหนี้ Restructuring & Government & State Enterprise Global Transaction Assetและบริหารทรัพย์สิน Management Group Relations Group Banking Group

Human Resources & Technologyสายงานเทคโนโลยี Group Corporate Governance Group

Krungthai Credit-Related Business Capital Market Business Insurance Business Support Business Group

The Board of Directors As at December 31, 2020

01 | Mr. Krisada Chinavicharana Chairman Annual Report 2020 011

02 | Mr. Krairit Euchukanonchai 03 | Mr. Vichai Assarasakorn

Vice Chairman, Director, Independent Director, Chairman of the Board of Executive Directors and Chairman of the Audit Committee and Chairman of the Risk Oversight Committee Member of the Corporate Governance and Social Responsibility Committee

04 | Mr. Thanwa Laohasiriwong 05 | Mr. Payong Srivanich Director, Independent Director, President (Authorized Signatory Director), Chairman of the Nominating and Remuneration Committee, Executive Director, Member of the Compliance Committee and Member of the Risk Oversight Committee and Member of the Risk Oversight Committee Corporate Secretary

03 05

04 02 012

The Board of Directors As at December 31, 2020

06 | Mr. Teerapong Wongsiwawilas 07 | Prof.Dr. Kittipong Kittayarak Director, Independent Director, Director, Independent Director, Chairman of the Compliance Committee and Chairman of the Corporate Governance and Social Member of the Nominating and Remuneration Committee Responsibility Committee and Member of the Compliance Committee

08 | General Tienchai Rubporn 09 | Mr. Poonnis Sakuntanaga Director, Chairman of the Independent Directors Committee, Director, Executive Director and Member of the Audit Committee and Member of the Risk Oversight Committee Member of the Compliance Committee

07 08

06 09 Annual Report 2020 013

10 | Ms. Patricia Mongkhonvanit 11 | Ms. Nitima Thepvanangkul Director, Member of the Nominating Director, Independent Director, and Remuneration Committee and Member of the Audit Committee and Member of the Corporate Governance Member of the Corporate Governance and Social Responsibility Committee and Social Responsibility Committee

12 | Mr. Lavaron Sangsnit Director, Executive Director and Member of the Risk Oversight Committee

11 10 12 014

The Executive Officers As at December 31, 2020

01 | Mr. Payong Srivanich President Annual Report 2020 015

02 | Mr. Poonpat Sripleng 03 | Ms. Praralee Ratanaprasartporn

Senior Executive Vice President - Senior Executive Vice President - Head of Risk Management Group Head of Digital Solutions Group

04 | Mr. Weerapong Suppasedsak 05 | Mr. Suratun Kongton Senior Executive Vice President - Senior Executive Vice President - Head of Business Center Group Head of Corporate Banking Group 2

06 | Mr. Ekachai Techawiriyakul Senior Executive Vice President - Head of Corporate Banking Group 1

03 04 05

06 02

01 | Mr. Payong Srivanich President 016

The Executive Officers As at December 31, 2020

07 | Mr. Rawin Boonyanusasna 08 | Ms. Saranya Vejakul Senior Executive Vice President - Senior Executive Vice President - Head of Global Markets Group Head of Financial Management Group

09 | Mr. Santi Parivisutt 10 | Mr. Suppawat Wadhanapatee Senior Executive Vice President – Senior Executive Vice President - Head of Operation Group Head of Human Resources and Corporate Governance Group

11 | Mr. Tawatchai Cheevanon Senior Executive Vice President - Head of Global Transaction Banking Group

09 10 07

08 11 Annual Report 2020 017

12 | Mr. Pongsit Chaichatpornsuk 13 | Dr. Polawat Witoolkollachit Senior Executive Vice President – Senior Executive Vice President – Head of Compliance and Legal Management Group Head of Technology Group

14 | Mr. Kittipat Peantham 15 | Mr. Pichit Jongsaliswang First Executive Vice President - First Executive Vice President - Head of Government & State Enterprise Relations Group Head of Retail Strategy Product & Segmentation Group

16 | Mr. Chanchai Sinsuparatn First Executive Vice President - Head of Retail Shared Services Group

13 14 15

12 16 018

The Executive Officers As at December 31, 2020

17 | Mr. Panabhand Hankijjakul 18 | Mr. Krit Chamapisit First Executive Vice President – First Executive Vice President – Head of Internal Audit Group Head of Communication and Branding Group

19 | Mr. Chalerm Pradidarecheep 20 | Ms. Suwanna Anantanond First Executive Vice President – First Executive Vice President - Head of Retail Banking Sales and Distribution Group Head of Credit Restructuring and Asset Management Group

21 | Mr. Pativate Santavanond First Executive Vice President

18 19 21

17 20 Annual Report 2020 019

Brief Biography of Board of Directors and Executive Officers Brief Biography of Board of Directors (As at December 31, 2020) 1. Mr. Krisada Chinavicharana 2. Mr. Krairit Euchukanonchai Chairman Vice Chairman Age 57 Chairman of the Board of Executive Directors Date of Appointment Chairman of the Risk Oversight Committee February 7, 2020 Age 65 Education Date of Appointment • M.B.A., University of New Haven, USA October 15, 2015 • LL.B., Chulalongkorn University Education Training Program • Master of Business Administration (Finance and Banking), • Class 54, National Defense Course, North Texas State University, USA National Defense College • Bachelor of Science, Chulalongkorn University • Class 186/2014, Director Certification Program (DCP), Training Program IOD • Class 16/2007, Role of the Chairman Program (RCP), IOD • Year 2010, Top Executive Program, • Class 59/2005, Director Certification Program (DCP), IOD The Office of the Civil Service Commission • Top Executive Program in Energy Literacy, • Year 2004, Financial Instrument and Markets, Thailand Energy Academy Harvard Business School Number of Shares in Company None Number of Shares in Company None % of Shares in Company None % of Shares in Company None (not changed since 1 January 2020) (not changed since 7 February 2020) Family Relationship with Director and Executive officer None Family Relationship with Director and Executive officer None Position in Other Listed Companies Positions in Other Listed Companies 2014 - Present Independent Director, Chairman of 2020 - Present Independent Director, BCPG Pcl. the Audit Committee and Member of 2009 - Present Director and Member of Nomination Nomination and Corporate Governance Committee, Airports of Thailand Pcl. Committee, Advanced Info Service Pcl. Positions in Non-Listed Companies/Other Organizations Positions in Non-Listed Companies/Other Organizations 2020 - Present Permanent Secretary, Ministry of Finance 2020 - Present Chairman, Infinitas by Krungthai Co., Ltd. 2015 - Present Director, Erawan Hotel Pcl. 2014 - Present Director, Advanced Wireless Network Co.,Ltd. Experience over Past 5 Years 2003 - Present Chairman, V.Body & Paint Co., Ltd. 2018 - 2020 Director-General, Thai Customs 2000 - Present Chairman, V.Group Honda Cars Co., Ltd. 2017 - 2019 Director, Bank for Agriculture and 1998 - Present Chairman, V.Auto Sales Co., Ltd. Agricultural Cooperatives 1998 - Present Chairman, V.Conglomerate Co., Ltd. 2015 - 2019 Director, Deposit Protection Agency (DPA) Experience over Past 9 Years 2018 Director, PTT Pcl. 2018 - 2020 Chairman and Independent Director, PTT Pcl. 2017 - 2018 Director-General, The Excise Department 2017 - 2019 Chairman, 2016 - 2017 Director, Muang Thai Insurance Pcl. Mass Rapid Transit Authority of Thailand 2015 - 2017 Director, Bangchak Corporation Pcl. 2011 - 2012 Director and Member of the Audit 2014 - 2017 Director, Bank of Thailand Committee, PTT Pcl. 2014 - 2017 Director, Aeronautical Radio of Thailand Ltd. 2011 - 2012 Director, PTT Exploration and Production Pcl. 2014 - 2017 Director-General, The Fiscal Policy Office 2006 - 2012 Chairman and Chairman of the Risk Management Committee, Krungthai Asset Management Pcl. 2001 - 2011 Director and Member of the Investment Committee, Siam Commercial New York Life Insurance Pcl. 020

3. Mr. Vichai Assarasakorn Experience over Past 5 Years Director 2014 - 2020 Independent Director and Member of Independent Director the Audit Committee, PTT Pcl. Chairman of the Audit Committee 2011 - 2014 Secretary General, Member of the Corporate Governance and Anti-Corruption Organization of Thailand Social Responsibility Committee Age 60 4. Mr. Thanwa Laohasiriwong Date of Appointment Director November 24, 2017 Independent Director Education Chairman of the Nominating and Remuneration Committee • Bachelor of Engineering in Electrical Engineering, Member of the Compliance Committee The University of New South Wales, Australia Member of the Risk Oversight Committee Training Program Age 55 • Year 2018, Cybersecurity, Cyber Resilience & Privacy Date of Appointment Risk in the Era of Digital Transformation, January 26, 2016 ACIS Professional Center Education • Class 22, National Defence Course for the Joint • Bachelor of Engineering (Computer), State-Private Sectors, The National Defence College King Mongkut’s Institute of Technology Ladkrabang • Class 215/2016, Director Certification Program (DCP), IOD Training Program • Class 7/2016, Top Executive Program in Energy Literacy, • Class 30/2020, Top Management Program, Capital Thailand Energy Academy Market Academy, The Stock Exchange of Thailand • Class 8/2015, Top Executive Program in Commerce • Year 2020, Cyber Resilience Program, Bank of Thailand and Trade (TEPCoT), Commerce Academy, • Class 20/2019, Corporate Governance for Director and University of the Thai Chamber of Commerce Top Management of State Owned Enterprise and • Year 2013, ASEAN Executive Management Public Organization Course, Public Director Institute (PDI), Programme, Sasin Graduate Institute of Business King Prajadhipok’s Institute Administration of Chulalongkorn University (Sasin) • Class 13/2019, Top Executive Program in Energy Literacy, • Class 12/2011, Top Management Program, Capital Thailand Energy Academy Market Academy, The Stock Exchange of Thailand • Class 3/2019, Executive Program on Rule of Law and Number of Shares in Company None Development (RoLD), Thailand Institute of Justice (TIJ) % of Shares in Company None • Year 2018, Cybersecurity, Cyber Resilience & Privacy (not changed since 1 January 2020) Risk in the Era of Digital Transformation, Family Relationship with Director and Executive officer None ACIS Professional Center Position in Other Listed Companies • Class 60, National Defence Course, 2019 - Present Independent Director and Member of National Defence College the Audit Committee, Asian Sea Corporation Pcl. • Class 45/2019, Role of the Chairman Program (RCP), IOD Positions in Non-Listed Companies/Other Organizations • Class 2/2017, Boardroom Success through Financing 2020 - Present Committee member of the Prevention and Investment (BFI), IOD and Suppression of Corruption and Abuse of • Class 2/2016, Driving Company Success with IT Powers Reform of the Thailand’s National Governance (ITG), IOD Reform, Office of the National Economic • Class 4/2016, Environmental Governance for Executive and Social Development Council Officer, Department of Environmental Quality 2014 - Present Director, Panel Plus Co., Ltd. Promotion (DEQP) , Ministry of Natural Resources and 2014 - Present Director, Panel Plus MDF Co., Ltd. Environment 2014 - Present Vice Chairman, • Class 20/2015, Advanced Audit Committee Program Anti-Corruption Organization of Thailand (AACP), IOD 2013 - Present Vice Chairman, • Class 1/2015, Ethical Leadership Program (ELP), IOD The Thai Chamber of Commerce • Class 22/2014, Successful Formulation & Execution of 1995 - Present Director, Shiang Heng International Co.,Ltd Strategy (SFE), IOD Annual Report 2020 021

• Class 10/2004, Finance for Non-Finance Directors Training Program (FND), IOD • TIJ Executive Program on the Rule of Law and • Class 43/2004, Director Certification Program (DCP), IOD Development : RoLD 2019 ,Thailand Institute of Justice (TIJ) • Year 2001, IBM/Harvard Management Development • Year 2018, Cybersecurity, Cyber Resilience & Privacy Program Risk in the Era of Digital Transformation, • Year 1998, IBM/INSEAD Management Development ACIS Professional Center Program • Class 223/2016, Director Certification Program (DCP), IOD Number of Shares in Company None • Training and Development for High Executive Project, % of Shares in Company None Royal Thai Police (not changed since 1 January 2020) Number of Shares in Company None Family Relationship with Director and Executive officer None % of Shares in Company None Positions in Other Listed Companies (not changed since 1 January 2020) 2018 - Present Advisor of Investment Committee, BCPG Pcl. Family Relationship with Director and Executive officer None 2014 - Present Independent Director and Chairman of Position in Other Listed Companies None the Audit Committee, TPBI Pcl. Positions in Non-Listed Companies/Other Organizations Positions in Non-Listed Companies/Other Organizations 2020 - Present Chairman, Thai Bankers’ Association 2019 - Present Director, Relationship Republic Co.,Ltd 2020 - Present Private Sector Committee, 2018 - Present Member of the Support Research and Board of the Office of SMEs Promotion, Innovation Administration Committee, The Office of SMEs Promotion National Research Council of Thailand (NRCT) 2020 - Present Director, National Strategic Committee, Experience over Past 5 Years Office of the National Economic and 2018 - 2020 Independent Director and Member of Social Development Council the Audit Committee, 2020 - Present Director, Eastern Economic Corridor (EEC) State Railway of Thailand Policy Committee, Eastern Economic 2018 - 2019 Honorary Director, Corridor (EEC) Thailand Research Fund Policy Committee, 2020 - Present Director, Commission Policy on Private The Thailand Research Fund (TRF) Participation in State Affairs, 2015 - 2019 Chairman, Humanica Pcl. State Enterprise Policy Office 2014 - 2018 Director and Executive Director, TOT Pcl. 2020 - Present Director, Business Advisory of Center for 2011 - 2017 Independent Director and Member of Covid-19 Situation Administration (CCSA), the Audit Committee, Asiasoft Corporation Pcl. Office of the National Economic and 2015 - 2016 Chairman, Independent Director and Social Development Council Chairman of the Audit Committee, 2020 - Present Committee, The Board of Anti-Corruption ASN Broker Pcl. Organization of Thailand Foundation, 2011 - 2016 Independent Director and Member of Anti-Corruption Organization of Thailand the Audit Committee, Easy Buy Pcl. Foundation 2020 - Present Advisor, Bureaucracy System 5. Mr. Payong Srivanich Development Subcommittee about President (Authorized Signatory Director) Studying and Setting Guidelines Executive Director the Thailand National Digital Trade Platform Member of the Risk Oversight Committee Office of the Public Sector Development Corporate Secretary Commission Age 52 2020 - Present Committee, Capital Market Development Date of Appointment Commission, Fiscal Policy Office • President : November 8, 2016 2020 - Present Chairman, Analyze and Propose • Renewal the President for another term : Economic Management Measures in November 8, 2020 the Urgent Period Subcommittee under • Corporate Secretary : July 8, 2020 the Executive Committee on Economic Education Situation Affected by the Coronavirus • MBA, University of Pittsburgh, Pittsburgh, Pennsylvania, 2019 Outbreak, Office of the National USA Economics and Social Development • BS in Industrial Engineering, University of Arizona, Council Tucson, Arizona, USA 022

2020 - Present Director, Payment Systems Committee 2020 - Present Committee member of the Political Reform (PSC), Bank of Thailand of the Thailand’s National Reform, 2020 - Present Board Member, Office of the National Economic and Thailand Board of Investment (BOI) Social Development Council 2020 - Present Chairman, National Digital ID Co., Ltd. 2019 - Present National Science and Technology 2020 - Present Co-Chairmen, Development Committee, The Joint Standing Committee on Commerce, National Science and Technology Industry and Banking (JSCCIB) Development Agency 2020 - Present Chairman, Development of Database 2019 - Present Honorable Special Investigation Systems and Information Technology in Committee (Law), Department of Public Financial Institutions Subcommittee Special Investigation, Ministry of Justice 2020 - Present Director, The ASEAN Bankers Association (ABA) 2018 - Present Council of State No.7 (Natural Resources 2019 - Present Senior Expert Committee, The National and Environment Law), Financial Institution Development Board Office of the Council of State 2018 - Present The MOF Big Data Steering Committee, 2017 - Present Secretary-General to the Cabinet, Ministry of Finance The Secretariat of the Cabinet 2017 - Present Chairman, National ITMX Co., Ltd. Experience over Past 5 Years Experience over Past 5 Years 2015 - 2017 Deputy Secretaries-General to 2016 Director, Krungthai-AXA Life Pcl. the Cabinet, The Secretariat of the Cabinet 2015 - 2016 Senior Executive Vice President - Head of Global Markets Group, Krungthai Bank Pcl. 7. Prof.Dr. Kittipong Kittayarak Director 6. Mr. Teerapong Wongsiwawilas Independent Director Director Chairman of the Corporate Governance and Independent Director Social Responsibility Committee Chairman of the Compliance Committee Member of the Compliance Committee Member of the Nominating and Remuneration Committee Age 62 Age 56 Date of Appointment Date of Appointment July 24, 2014 December 21, 2020 Education Education • Doctor of the Science of Laws (J.S.D.), • Bachelor of Laws, Thammasat University Stanford University, USA (Fulbright Scholarship) Training Program • Master of Laws (LL.M.), Harvard University, • Class 246/2017, Director Certification Program (DCP), USA (Fulbright Scholarship) Thai Institute of Directors Association (IOD) • Master of Laws (LL.M.), Cornell University, • Class 57, National Defence Course, USA (OCSC Scholarship) The National Defence College • Honorary Doctorate Degree, Radboud University, • Class 8, Senior Executive Program, Netherland The Office of the Civil Service Commission • Barrister-at-Law, • Class 12/2013, Public Law and Management, Institute of Legal Education Thai Bar Association King Prajadhipok’s Institute • Bachelor of Laws (Honors), Chulalongkorn University Number of Shares in Company None Training Program % of Shares in Company None • Year 2020, Cyber Resilience Program, Bank of Thailand (not changed since 21 December 2020) • Year 2018, Cybersecurity, Cyber Resilience & Privacy Risk in Family Relationship with Director and Executive officer None the Era of Digital Transformation, ACIS Professional Center Position in Other Listed Companies • Class 49, National Defence Course, National Defence College 2017 - Present Independent Director and Member of • Class 18/2015, Advanced Audit Committee Program the Audit Committee, Bangchak Corporation Pcl. (AACP), IOD Positions in Non-Listed Companies/Other Organizations • Class 112/2014, Director Accreditation Program (DAP), IOD 2020 - Present Honorable Executive Director of • Class 1/2013, Certificate in Law for Democracy, the Judical Administration (Administration Office of the Constitutional Court and Management), Court of Justice • Class 1/2012, Top Executive Program in Energy Literacy, Thailand Energy Academy Annual Report 2020 023

• Class 8/2009, Top Management Program, Capital Market 8. General Tienchai Rubporn Academy, The Stock Exchange of Thailand Director • Class 10/2006, Top Executive Program in Justice Chairman of the Independent Directors Committee Administration, Judicial Training Institute Member of the Audit Committee • Class 5/2001, Politics and Governance in Development Member of the Compliance Committee Systems or Executive Course, King Prajadhipok’s Institute Age 65 Number of Shares in Company None Date of Appointment % of Shares in Company None January 28, 2015 (not changed since 1 January 2020) Education Family Relationship with Director and Executive officer None • Master of Arts, Command and General Staff College Positions in Other Listed Companies • Class 27, Bachelor of Science Chulachomklao Royal 2016 - Present Independent Director, Dusit Thani Pcl. Military Academy 2014 - Present Independent Director and Chairman of Training Program the Corporate Governance Committee, • Year 2018, Cybersecurity, Cyber Resilience & Privacy PTT Pcl. Risk in the Era of Digital Transformation, Positions in Non-Listed Companies/Other Organizations ACIS Professional Center 2019 - Present Chancellor of the King Mongkut’s Institute of • Class 240/2017, Director Certification Program (DCP), IOD Technology Ladkrabang • Class 22/2016, Advanced Audit Committee Program 2018 - Present Committee, Ramathibodi Foundation (AACP), IOD 2018 - Present Director, Chakri Naruebodindra Medical • Class 3/2016, Ethical Leadership Program (ELP), IOD Institute and Ramathibodi Chakri • Class 2/2016, Driving Company Success with IT Naruebodindra Hospital Governance (ITG), IOD 2017 - Present Executive Director and Vice Chairman, • Class 15/2016, Corporate Governance for Capital Friend in Need (of “PA”) Volunteers Market Intermediaries (CGI), IOD Foundation, Thai Red Cross • Class 28/2016, Successful Formulation & Execution of 2017 - Present Executive Subcommittee, Office of Strategy (SFE), IOD the Judiciary - International Affairs • Class 28/2015, Financial Statements for Directors (FSD), IOD 2015 - Present Executive Director, Thailand Institute of • Class 121/2015, Director Accreditation Program (DAP), IOD Justice (Public Organization) • Class 47, Security Studies Program, 2014 - Present Director of the Civil Service Sub- Royal Thai Army War College commission on Human Resource • Resource Management Introductory Course, Management System Development, United States Army Finance School Fort Benjamin Harrison, Office of the Civil Service Commission Indiana, USA 2014 - Present Director, consider improvement on • Planning, Programing Budgeting, Execution System Course, the Code of Criminal Procedure, United States Army Finance School Fort Benjamin Harrison, Office of the Council of State Indiana, USA 2014 - Present Chairman, Bangkok University Council Number of Shares in Company None 2011 - Present Executive Director and Chairman % of Shares in Company None (Thailand Branch), ASIA Crime Prevention (not changed since 1 January 2020) Foundation (ACPF) Family Relationship with Director and Executive officer None 2010 - Present Member of the Board of Committee, Position in Other Listed Companies None Thai Bar Association Position in Non-Listed Companies/Other Organizations 2009 - Present Member of Mahidol University Council None Experience over Past 5 Years Experience over Past 5 Years 2014 - 2015 Advisor to the Prime Minister 2016 Advisor of the Public Budget Expenditures Committee 2016 Senior Expert, The Royal Army 2014 - 2016 Permanent Secretary, Office of the Army Comptroller 2014 - 2016 Secretary of the Public Budget Expenditures Committee 024

9. Mr. Poonnis Sakuntanaga 10. Ms. Patricia Mongkhonvanit Director Director Executive Director Member of the Nominating and Remuneration Committee Member of the Risk Oversight Committee Member of the Corporate Governance and Age 62 Social Responsibility Committee Date of Appointment Age 49 January 28, 2015 Date of Appointment Education December 27, 2018 • Master of Business Administration (Marketing), Education University of Wisconsin - Madison, USA • Master of Laws (Tax), The London School of Economics • Master of Business Administration (Finance), and Political Science, University of London, Middle Tennessee State University, USA United Kingdom • Bachelor of Business and Accountancy (Finance and • Master of Arts (Development Policy and Public Banking), Chulalongkorn University Administration), University of Wisconsin - Madison, USA Training Program • Bachelor of Public Administration, • Class 46/2020, Role of the Chairman Program (RCP), IOD Chulalongkorn University • Year 2020, Cyber Resilience Program, Bank of Thailand Training Program • Year 2019, Cyber Resilience Program, Bank of Thailand • Class 43/2020 Financial Statements for Directors (FSD), IOD • Class 10/2019, IT Governance and Cyber Resilience • Class 13/2020 IT Governance and Cyber Resilience Program (ITG), IOD Program (ITG), IOD • Year 2018, Cybersecurity, Cyber Resilience & Privacy • Year 2020, Cyber Resilience Program, Bank of Thailand Risk in the Era of Digital Transformation, • Year 2019, Cyber Resilience Program, Bank of Thailand ACIS Professional Center • Class 159/2019, Director Accreditation Program (DAP), IOD • Class 7/2017, Ethical Leadership Program (ELP), IOD • Class 274/2019, Director Certification Program(DCP), IOD • Class 8/2017, Risk Management Program for Corporate • Exponential Manufacturing Thailand 2019 Program, Leaders (RCL), IOD The Federation of Thai Industries • Class 27/2016, Successful Formulation & Execution of • Future Economy and Internet Governance - Executive Strategy (SFE), IOD Program, Future Economy and Internet Governance • Class 113/2009, Director Certification Program (DCP), IOD (FEGO) • Class 4, Corporate Governance for Director and Top • Class 26/2018 ,Top Management Program, Capital Management of State Owned Enterprise and Public Market Academy, The Stock Exchange of Thailand Organization Course, Public Director Institute (PDI), Number of Shares in Company None King Prajadhipok’s Institute % of Shares in Company None • In house Training Programs, Citibank (not changed since 1 January 2020) • Asian Banking and Sovereign Conference 2006 by Moody’s Family Relationship with Director and Executive officer • Regional Workshop “Risk Modeling for Sovereign Debt None Portfolio” by World Bank Position in Other Listed Companies None Number of Shares in Company None Positions in Non-Listed Companies/Other Organizations % of Shares in Company None 2020 - Present Independent Director and Member of (not changed since 1 January 2020) the Audit Committee, BBGI Pcl. Family Relationship with Director and Executive officer 2019 - Present Director General, None Public Debt Management Office Position in Other Listed Companies None 2019 - Present Director, PTT International Trading Private Co., Ltd. Position in Non-Listed Companies/Other Organizations 2017 - Present Director, Thai Smile Airway Co., Ltd. 2017 - Present Director and Executive Director, Experience over Past 5 Years Elixir Foods & Beverages Co., Ltd. 2018 - 2019 Inspector General, Office of Experience over Past 5 Years the Permanent Secretary, Ministry of Finance 2015 - 2017 Director and Executive Director, 2018 Principal Advisor on Strategic Tax Thaikong Co., Ltd. Administration (Energy Industry), 2003 - 2016 President, IQ Plus & Management Co., Ltd. The Revenue Department 2017 - 2018 Deputy Director, The Revenue Department Annual Report 2020 025

2017 - 2018 Director, Liquor Distillery Organization 2016 Executive Vice President, Financial Policy 2014 - 2017 Director of Tax Policy and Planning Division, and Corporate Accounting, PTT Pcl. The Revenue Department 2014 - 2018 Executive Vice President, Corporate Accounting and Finance, PTT Pcl. 11. Ms. Nitima Thepvanangkul Director 12. Mr. Lavaron Sangsnit Independent Director Director Member of the Audit Committee Executive Director Member of the Corporate Governance and Member of the Risk Oversight Committee Social Responsibility Committee Age 53 Age 63 Date of Appointment Date of Appointment December 21, 2020 April 12, 2019 Education Education • M.S. (Economic Policy and Planning), • Master of Economics Program (Finance) (Hons.), Northeastern University, USA National Institute of Development Administration (NIDA) • Bachelor of Economics, Chulalongkorn University • Bachelor of Accounting, Chulalongkorn University Training Program Training Program • Class 12/2018, Top Executive Program in Energy Literacy, • Year 2019, Cyber Resilience Program, Bank of Thailand Thailand Energy Academy • Class 34/2019, Advanced Audit Committee Program • Class 25/2017, Top Management Program, (AACP), IOD Capital Market Academy • Class 24/2017, Top Management Program, • Class 205/2015 Director Certification Program (DCP), IOD Capital Market Academy • Class 58, National Defence Course, • Class 3/2016, Ethical Leadership Program (ELP), IOD The National Defence College • Class 18/2015, Anti Corruption: The Practical Guide • Class 7, Executive Program in Public Administration, (ACPG), IOD Office of the Civil Service Commission (OCSC) • Class 3/2014, Risk Management Committee Program Number of Shares in Company None (RMP), IOD % of Shares in Company None • Class 126/2009, Director Certification Program (DCP), IOD (not changed since 21 December 2020) • NIDA - Wharton Executive Leadership Program, Family Relationship with Director and Executive officer The Wharton School, University of Pennsylvania, USA None • PTT Executive Leadership Program, General Electric Position in Other Listed Companies None Crotonville, New York, USA Positions in Non-Listed Companies/Other Organizations Number of Shares in Company None 2020 - Present Director-General, The Excise Department % of Shares in Company None 2018 - Present Director and Chairman of (not changed since 1 January 2020) the Board of Executive Directors, Family Relationship with Director and Executive officer Aeronautical Radio of Thailand Ltd. None 2018 - Present Director, Tobacco Authority of Thailand Position in Other Listed Companies None Experience over Past 5 Years Position in Non-Listed Companies/Other Organizations 2018 - 2020 Director-General, The Fiscal Policy Office None 2018 - 2020 Chairman, Deposit Protection Agency Experience over Past 5 Years 2018 - 2020 Board Member, 2017 - 2018 Councilor and Executive Director, Capital Market Supervisory Board, Vidyasirimedhi Institute of Science and The Securities and Exchange Commission Technology (VISTEC) 2018 - 2020 Director, Bank of Thailand 2016 - 2018 Director and Member of 2018 - 2020 Member of the Financial Institutions Policy the Risk Management Committee, Committee, Bank of Thailand Thai Oil Pcl. 2016 - 2020 Director and Chairman of the Risk 2016 - 2018 Chief Financial Officer, PTT Pcl. Management Committee, 2015 - 2018 Chairman, Krungthai Asset Management Pcl. PTT International Trading Private Co., Ltd. 2016 - 2018 Inspector General, 2015 - 2018 Chairman, PTT Energy Resources Co.,Ltd. Office of the Permanent Secretary, Ministry of Finance 026

Brief Biography of Executive Officers Family Relationship with Director and Executive Officer None (As at December 31, 2020) Position in Other Listed Companies None 1. Mr. Payong Srivanich Positions in Non-Listed Companies/Other Organizations President 2017 - Present Chairman, KTB General Services and Age 52 Security Co., Ltd - Please refer to page 21 2014 - Present Executive Director, Krungthai ZMICO Securities Co., Ltd 2. Mr. Poonpat Sripleng Experience over Past 5 Years Senior Executive Vice President - 2016 - 2017 Chairman, Krungthai Card Pcl. Head of Risk Management Group 2014 - 2016 Executive Director, KTB Leasing Co., Ltd. Age 56 2013 - 2016 First Executive Vice President - Managing Date of Appointment Director, Risk Management Group, October 1, 2013 Krung Thai Bank Pcl. Education • MS (Economic), Thammasat University 3. Ms. Praralee Ratanaprasartporn • BS (Economic), Thammasat University Senior Executive Vice President - Training Program Head of Digital Solutions Group • The Anti-Money Laundering and the Counter- Age 51 Terrorism and Proliferation of Weapon of Mass Date of Appointment Destruction Financing (AML/CTPF) (2019) May 2, 2013 • Top Executive Program in Energy Literacy 2019, Education Thailand Energy Academy • MBA (Finance), University of Alabama at Birmingham, USA • Certificate, Role of the Chairman Program, IOD • BBA (Accounting) (Auditing), Thammasat University • Certificate, Corporate Governance for Capital Training Program Market, IOD • Legal Strategies for Personal Data Management • IFRS 9 Implementation 2017, Incisive Risk Information Chulalongkorn University (2019) Limited • Innovations Payment, Master Card, UK (2018) • Executive Leadership Development Program (ELDP) • Fintech Strategy and Innovation Payment System, 2015, Compass Institute, LEAD Business Institute and Plug and MasterCard, Singapore (2018) Cornell University • SAS Global Forum 2018 (Executive Program), • The Risk Games Conference 2013: The Asian Banker SAS Software, USA (2018) Summit 2013, Jakarta, Indonesia • Blockchain in Government, Trueventus, Singapore • Corporate Credit Rating Analysis, Hong Kong (2018) • Bourse Game; Union Bank of Switzerland, Hong Kong • Singapore Fintech Festival 2018, Baker McKenzie, • Portfolio Management; Euro Money, Hong Kong Singapore (2018) • Project Management; Alltel Information System • Co-Creation Workshop, VISA International, • Syndication Loan; DC Gardner Singapore (2017) • Problem Solving and Decision Making, Kepner Tregoe • Innovations Payment - MasterCard Asia/Pacific, • Leadership Development Institute, Kepner Tregoe VISA International, MSI Global Private Limited, • Asset & Liability Management, Sendero Institution Singapore (2017) • Profitability Measurement and Fund Transfer Pricing, • Innovations Payment, UnionPay International, Sendero Institution China (2017) • Risk Management, Risk Metrics • Google Next 2017, Google Cloud Platform, APAC, • Advance Volatility Trading; Singapore USA (2017) • Advance Banking and Risk Management Program, • Analytics Experience, SAS Software, Italy (2016) Nanyang Technology University, Singapore • Asia Banking Analytics Roundtable, Mckinsey, • Retail Lending and Stress Test, Singapore Hong Kong (2016) • FRM (Financial Risk Manager; GARP) • Director Certification Program - DCP, Number of Shares in company None Thai Institute of Directors Association (IOD) (2016) % of Shares in company None • Customer Segmentation and Micro Segment Analytics (Not changed since January 1, 2020) 2016 by SAS Annual Report 2020 027

• Executive Leadership Development Program (ELDP) • Executive Leadership Development Program (ELDP) 2015, Compass Institute, LEAD Business Institute and 2015, Compass Institute, LEAD Business Institute and Cornell University Cornell University • KTB Digital Banking Workshop 2015 • Interest rate Indexed and Derivatives (2015) • Advance Management Program INSEAD Business • TLCA Executive Development Program 2014, School - European Campus, France (2011) Thai Listed Companies Association • Customer Experience Workshop, Malaysia (2010) • FATCA Regulations for the Board of Directors and • SME Strategy Workshop, GE, Singapore (2007) Executives of the Bank (2014) • Global Mortgage Conference, GE, USA (2006) Number of Shares in company None • Advance Manager Course % of Shares in company None • Six Sigma/ Quality Training (2003) (Not changed since January 1, 2020) Number of Shares in company None Family Relationship with Director and Executive Officer None % of Shares in company None Position in Other Listed Companies None (Not changed since January 1, 2020) Position in Non-Listed Companies/Other Organizations Family Relationship with Director and Executive Officer None 2019 - Present Executive Director, Position in Other Listed Companies Krungthai ZMICO Securities Co., Ltd. Apr. 2019 - Present Director, Krungthai Card Pcl. Experience over Past 5 Years Positions in Non-Listed Companies/Other Organizations 2016 - 2019 Director, Krungthai Panich Insurance Co., Ltd Oct. 2020 - Present Director and Acting President, 2012 - 2019 Director, Bangkok Expressway and Metro Pcl. Infinitas by Krungthai Co., Ltd. 2016 - 2018 Senior Executive Vice President - 2017 - Present Director, Krungthai-AXA Life Insurance Pcl. Head of Corporate Banking Group 2, Experience over Past 5 Years Krung Thai Bank Pcl. 2019 - Sep. 2020 Director, National Digital ID Co., Ltd. 2014 - 2016 Director/Chairman of the Audit Committee 2014 - Feb. 2020 Director, KTB Leasing Co., Ltd. at Suvarnabhumi Airport Hotel Co., Ltd. 2016 - Dec. 2019 Senior Executive Vice President - 2014 - 2016 First Executive Vice President - Managing Head of Retail Shared Service Group Director Corporate, Banking Group 2, and Data Innovation Krung Thai Bank Pcl. 2014 - 2016 First Executive Vice President - Managing Director, Retail Shared Services 5. Mr. Suratun Kongton Group, Krung Thai Bank Pcl. Senior Executive Vice President - Head of Corporate Banking Group 2 4. Mr. Weerapong Suppasedsak Age 54 Senior Executive Vice President - Date of Appointment Head of Business Center Group October 8, 2018 Age 54 Education Date of Appointment • Master of public administration, University of Southern December 26, 2014 California, USA Education • Bachelor of Political Science Public Administration • Master of Economics (Finance), National Institute of (Public Finance), Chulalongkorn University Development Administration (NIDA) Training Program • Bachelor of International Economics, • National Defence Course, Class 62, Ramkhamhaeng University National Defence College Training Program • Introduction to Thai Financial Reporting Standards 9 • Personal Data Protection Act B.E. 2562: PDPA (Updated) (TFRS 9) (2020) (2020) • Personal Data Protection Act B.E. 2562: PDPA (Updated) • The Anti-Money Laundering and the Counter-Terrorism (2020) and Proliferation of Weapon of Mass Destruction • The Anti-Money Laundering and the Counter-Terrorism Financing (AML/CTPF) (2019) and Proliferation of Weapon of Mass Destruction • Executive Talk 2019 Financing (AML/CTPF) (2019) • National Defence Course, Class 60, • Reimaging Your Business for the Digital Age 2019 National Defence College • KTB executive refining program (One-on-one) (2016) 028

Number of Shares in company None • Executive Leadership Development Program (ELDP) % of Shares in company None 2015, Compass Institute, LEAD Business Institute and (Not changed since January 1, 2020) Cornell University Family Relationship with Director and Executive officer None Number of Shares in company None Position in Other Listed Companies % of Shares in company None 2019 - Present Director, Dhipaya Insurance Pcl. (Not changed since January 1, 2020) Position in Non-Listed Companies/Other Organizations None Family Relationship with Director and Executive officer None Experience over Past 5 Years Position in Other Listed Companies None Feb. - Jun. 2018 Head of Corporate Banking Group, Positions in Non-Listed Companies/Other Organizations Bank of Ayudhya Pcl. 2019 - Present Chairman and Chairman of the Audit 2017 - 2018 Director, Krungsri Securities Pcl. Committee, Krungthai IBJ Leasing Co., Ltd. 2017 - 2018 Director, General Card Services Co., Ltd. 2017 - Present Director, Suvarnabhumi Airport Hotel Co., Ltd. 2010 - 2018 Director, Tumtumpai Co., Ltd. Experience over Past 5 Years 2016 - 2017 Head of Corporate and Investment 2017 - 2018 First Executive Vice President - Banking Group, Bank of Ayudhya Pcl. Head of Corporate Banking Group 2, 2012 - 2016 Executive Vice President and Head of Krung Thai Bank Pcl. Corporate Banking Division 2, 2014 - 2017 Executive Vice President - Bank of Ayudhya Pcl. Sector Head Corporate Banking Sector 8, Krung Thai Bank Pcl. 6. Mr. Ekachai Techawiriyakul Senior Executive Vice President - 7. Mr. Rawin Boonyanusasna Head of Corporate Banking Group 1 Senior Executive Vice President - Age 59 Head of Global Markets Group Date of Appointment Age 46 November 1, 2017 Date of Appointment Education November 23, 2016 • Master of Business Administration, Thammasat University Education • Bachelor of Engineering, Chulalongkorn University • MSC. in Financial Engineering and Quantitative, Training Program University of Reading, United Kingdom • Top Executive Program in Commerce and Trade • MA. in International Economics and Finance, (TEPCoT), Class 13 (2020) Chulalongkorn University • Digital Transformation for CEO (2020) • BA. in Economics, Thammasat University • Introduction to Thai Financial Reporting Standards 9 Training Program (TFRS 9) (2020) • Executive Talk 2019 • Power of The Kingdom, Class 5/2019, • Blockchain & Bitcoin for Management, Class 1/2018, Chulalongkorn University Executive Program The Thai Institute of Banking and Finance Association • The Anti-Money Laundering and the Counter-Terrorism (TIBFA) and Proliferation of Weapon of Mass Destruction • Bank of Thailand’s Treasury Dealer Course (2017) Financing (AML/CTPF) (2019) • Bond Trader’s Refresher Course (2017) • Identity Determination and Desirable Behavior • Inspirational Leadership Course (2017) Management • Media Training for Spokespersons (2017) • Executive Talk 2019 • Customer Segmentation and Micro Segment Analytics • Principles for Consideration of Disciplinary Offenses and by SAS (2016) Examples of Relevant Judgments • KTB Executive Refining Program (2016) • Director Certification Program (DCP) 2018, • Strategic Planning Workshop (2015) Institute of Directors (IOD) • Creating the Performance-Driven Organization (2015) • Good Corporate Governance for Top Executives 2017, Number of Shares in company None LEAD Business Institute % of Shares in company None • Leaders as Coach 2017 (Not changed since January 1, 2020) • Digital Banking & Inspirational Leadership (2016) Family Relationship with Director and Executive officer None • Situational Leadership for Top Leaders (2016) Position in Other Listed Companies None Annual Report 2020 029

Positions in Non-Listed Companies/Other Organizations 9. Mr. Santi Parivisutt 2019 - Present Director/Director of the Investment Senior Executive Vice President - Subcommittee, The Thai Bond Market Head of Operation Group Association (ThaiBMA) Age 58 2019 - Present Director of Nomination and Remuneration Date of Appointment Committee, Krungthai ZMICO Securities Co.,Ltd. October 1, 2016 2018 - Present Director/Executive Director, Education Krungthai ZMICO Securities Co., Ltd. • MS (Economic), National Institute of Development 2017 - Present Director/Chairman of Investment Committee, Administration Krungthai-AXA Life Insurance Pcl. • Bachelor of Economics, Ramkhamhaeng University Experience over Past 5 Years Training Program 2016 - 2018 First Executive Vice President - Head of, • Ethical Leadership Program (ELP) 20/2020 Global Markets Group, Krung Thai Bank Pcl. • The Anti-Money Laundering and the Counter-Terrorism 2015 - 2016 Executive Vice President Team Leader, and Proliferation of Weapon of Mass Destruction Trading Team, Global Markets Group, Financing (AML/CTPF) (2020) Krung Thai Bank Pcl. • Introduction to Thai Financial Reporting Standards 9 (TFRS 9) (2020) 8. Ms. Saranya Vejakul • Personal Data Protection Act B.E. 2562: PDPA (Updated) Senior Executive Vice President - (2020) Head of Financial Management Group • Personal Data Protection Act with Roles and Age 51 Responsibilities of the Enterprise 2020 Date of Appointment • Corporate Governance for Director and Top Management July 1, 2019 of State-Owned Enterprise and Public Organization Education Course 2019, Public Director Institute (PDI), • MBA Executive Program, Chulalongkorn University King Prajadhipok’s Institute • Bachelor of Economics (Accounting), • The Anti-Money Laundering and the Counter-Terrorism Kasetsart University and Proliferation of Weapon of Mass Destruction Training Program Financing (AML/CTPF) (2019) • Top Management Program in Government Fiscal • Krungthai Strategy and Future Direction 2019 Management (GFM) 2020 • Executive Talk 2019 • TFRS 9: Financial Instruments - Hedge Accounting • Compliance Guidelines on Personal Data Protection (Advanced Workshop) 2020 Act, B.E. 2562 (2019) • CFO Focus On Financial Reporting 2019 • IFRS9 Accounting Standard 2019 • The Anti-Money Laundering and the Counter-Terrorism • Design Thinking: Growing the Right Mindset for Better and Proliferation of Weapon of Mass Destruction Compliance (2019) Financing (AML/CTPF) (2019) • Annual Audit Committee Conference KTB Group 2019 Number of Shares in company None • New Performance Evaluation Criteria (8 Core Business % of Shares in company None Enablers) for State-Owned Enterprise: Internal Audit (2019) (Not changed since January 1, 2020) • Industry Code of Conduct 2019 Family Relationship with Director and Executive officer None • Identity Determination and Desirable Behavior Position in Other Listed Companies None Management 2019 Position in Non-Listed Companies/Other Organizations • How to Develop a Risk Management Plan (HRP), 2020 - Present Executive Director, Class 16/2018, Thai Institute of Directors Association (IOD) Krungthai Panich Insurance Pcl. • Risk Management Program for Corporate Leaders Experience over Past 5 Years (RCL), Class 10/2018, Thai Institute of Directors Jul. 2019 - Oct. 2019 Financial Management Advisor to Association (IOD) the President, Krung Thai Bank Pcl. • One on One Executive Coaching, Class 1/2017, 2010 - 2019 EVP, Head of Financial Planning & Slingshot Coaching Co., Ltd. Analysis (PF&A), • Director Certification Program (DCP) 237/2017, Siam Commercial Bank Pcl. Thai Institute of Directors (IOD) • Advanced Audit Committee Program (AACP), Thai Institute of Directors (IOD) (2017) 030

• Internal Audit in Disruptive Technology, Federation of • Thailand Competitiveness Conference 2019 Accounting Professions Under the Royal Patronage of • Digital HR Forum 2019 His Majesty the King (2017) • Enhancing Corporate Governance of State-Owned • Good Corporate Governance for Top Executives 2017, Enterprise Management LEAD Business Institute • Identity Determination and Desirable Behavior • Annual Audit Committee Conference. CAACC (2016) Management • Digital Banking & Inspirational Leadership (2016) • Executive Talk 2019 • Crucial Conversations, PacRim Group (2016) • Annual Conference and Exposition, Society for Human • Executive Leadership Development Program (ELDP) Resource Management (SHRM), USA (2018) 2015, Compass Institute, LEAD Business Institute and • 6TH Compensation & Benefits Summit 2018, Cornell University Equip global, Singapore • FATCA for Director and Executive Officers • TMA Trend Talk #8 Renovate to Innovate: • Situational Leadership Certification (Train the Trainer) Moving Forward with Agility in the Digital Era, by Slingshot Group (2015) Thailand Management Association (TMA) (2018) Number of Shares in company 1,070 shares (held by spouse) • Good Corporate Governance for Top Executives 2017, % of Shares in company 0.00001% LEAD Business Institute (Not changed since January 1, 2020) • Digital Banking & Inspirational Leadership (2016) Family Relationship with Director and Executive officer None • How Digital Technology Transforms the Financial Position in Other Listed Companies None Service and Experiences (2016) Position in Non-Listed Companies/Other Organizations • Situational Leadership 2015, Slingshot Group Apr. 2020 - Present Director, KTB General Services • Executive Leadership Development Program (ELDP) and Security Co., Ltd. 2015, Compass Institute, LEAD Business Institute and Experience over Past 5 Years Cornell University Oct. 2016 - Mar. 2020 First Executive Vice President - • Professional Coach Certification Program 2015, Head of Internal Audit Group, Thailand Coaching Institute Krung Thai Bank Pcl. • The GRID for Supervisory Excellence - Experience 2014 - 2015 Senior Vice President - Sector Head, the Power to Change 2015, Credit Transaction, Audit Sector, Grid Organization Development LLC Krung Thai Bank Pcl. • Strategy and Innovation for Businesses in Asia (SIBA): CMMU Session (2014) 10. Mr. Suppawat Wadhanapatee • Workshop: The Leadership Talent Sustainability Across Senior Executive Vice President - Head of Borders 2013, Personnel Management Association of Human Resources and Corporate Governance Group Thailand - PMAT Age 50 Number of Shares in company None Date of Appointment % of Shares in company None October 1, 2016 (Not changed since January 1, 2020) Education Family Relationship with Director and Executive officer None • Doctor of Business Administration, Position in Other Listed Companies None Dhurakij Pundit University Position in Non-Listed Companies/Other Organizations None • Master of Business Administration/ finance, Experience over Past 5 Years Rensselaer Polytechnic Institute, USA Oct. 2016 - Mar. 2020 First Executive Vice President - • Master of Laws / International Law, Head of Human Resources and Chulalongkorn University Corporate Governance Group, • Bachelor of Laws, Chulalongkorn University Krung Thai Bank Pcl. Training Program 2013 - 2016 Executive Vice President - • Thailand HR Forum 2020 (Virtual Conference) 2020 Sector Head of Human Resources • Strategic Management in Corruption Prevention and Sector, Human Resources and Suppression Program for Chief Executive Officers Corporate Governance Group, • The Anti-Money Laundering and the Counter-Terrorism Krung Thai Bank Pcl. and Proliferation of Weapon of Mass Destruction Financing (AML/CTPF) (2019) Annual Report 2020 031

11. Mr. Tawatchai Cheevanon Training Program Senior Executive Vice President - • Financial Crime Prevention Program (Federal Bureau Head of Global Transaction Banking Group of Investigation: FBI), USA Age 52 • LS Course University of Washington, USA Date of Appointment • IMD Advanced Strategic Management January 2, 2019 • National Security Management for Senior Executives, Education Class 2, • Master of Business Administration, Seattle University, USA • National Defence Course for the Joint State-Private • Bachelor of Business Administration, Assumption University Sectors, Class 24, The National Defence College Training Program • Ethical Leadership Program (ELP), Class 11/2018, IOD • National Defence Course, Class 63, • Top Executive Program in Energy Literacy, Class 13, National Defence College Thailand Energy Academy • Master Deal Maker Program, University of Pennsylvania, USA • Top Executive Program in Justice Administration, • Director Certification Program (DCP), Class 24, Judicial Training Institute Thai Institute of Directors (IODs) Number of Shares in company None • Banking Institutes Program, Sydney, Australia % of Shares in company None • IBM Client Executive Program (CEP) Harvard University, USA (Not changed since January 1, 2020) Number of Shares in company None Family Relationship with Director and Executive officer None % of Shares in company None Position in Other Listed Companies None (Not changed since January 1, 2020) Position in Non-Listed Companies/Other Organizations None Family Relationship with Director and Executive officer None Experience over Past 5 Years Position in Other Listed Companies None 2014 - Oct. 2020 Director, TOT Pcl. Position in Non-Listed Companies/Other Organizations 2014 - Oct. 2020 Executive Vice President, 2020 - Present Committee Member, College of The Siam Commercial Bank Pcl. Innovation, Thammasat University 2019 - Present Director, 13. Dr. Polawat Witoolkollachit KTB Computer Services Co.,Ltd. Senior Executive Vice President - 2019 - Present Director, BCI (Thailand) Co.,Ltd. Head of Technology Group 2019 - Present Director, Age 51 InnoSpace (Thailand) Co.,Ltd. Date of Appointment 2016 - Present Director, October 5, 2020 Cycling Cloud Company Limited Education Experience over Past 5 Years • Diploma Thai Board of Orthopedic Surgery, Apr. 2019 - Apr. 2020 Director, Krungthai IBJ Leasing Co., Ltd. Thai Medical Council Jan. 2019 - Mar. 2020 First Executive Vice President - • Master of Science, Chiang Mai University Head of Global Transaction • Bachelor of Medicine, Doctor of Medicine Banking Group, Krung Thai Bank Pcl. Chiang Mai University 2017 - 2018 Director and Managing Director, Training Program Daingern Dotcom Co., Ltd. • Digital Leadership and Organization Innovation 2015 - 2018 Director and Managing Director, Management, Office of the Permanent Secretary, ASN Broker Public Co., Ltd. Ministry of Digital Economy and Society 2015 - 2018 Director and Managing Director, • Director Certification Program (DCP), Class 259/2018, ASN Life Broker Co., Ltd. IOD • Corporate Governance for Director and Top 12. Mr. Pongsit Chaichatpornsuk Management of State-Owned Enterprise and Public Senior Executive Vice President - Organization Course, Class 20, Public Director Institute Head of Compliance and Legal Management Group (PDI), King Prajadhipok’s Institute Age 56 • Politics and Governance in Development Systems or Date of Appointment Executive Course, Class 19, King Prajadhipok’s Institute October 1, 2020 • Certificate: The Driving Digital and Social Strategy, Education Harvard Business School (2015) • Bachelor of Laws, Ramkhamhaeng University • Top Management Program, Class 56, Ministry of Interior 032

Number of Shares in company None • National Defence Course, National Defence College % of Shares in company None (2018) (Not changed since October 5, 2020) • One on One Executive Coaching, Slingshot Group Family Relationship with Director and Executive officer None (2017) Position in Other Listed Companies None • Executive Leadership Development Program (ELDP) Positions in Non-Listed Companies/Other Organizations 2015, Compass Institute, LEAD Business Institute and Nov. 2020 - Present Director, Cornell University Infinitas by Krungthai Co., Ltd. • Wholesale Banking Transformation 2017 - Present Chairman of the Board of Directors, • FATCA for Director and Executive Officers KTB Computer Services Co.,Ltd. Number of Shares in company None Experience over Past 5 Years % of Shares in company None 2019 - Oct. 2020 Inspector, Higher Level, Ministry of (Not changed since January 1, 2020) Digital Economy and Society Family Relationship with Director and Executive officer None 2018 - 2019 Deputy Secretary General (Deputy Position in Other Listed Companies None Director - General, Executive Position in Non-Listed Companies/Other Organizations None Position, Primary Level) Office of Experience over Past 5 Years the Digital Economy and Society 2017 - 2018 Executive Vice President - Sector Head, Commission, Ministry of Digital Asset Management Group Credit Economy and Society Restructuring and Asset Management 2018 - 2018 Director of Personnel Division Group, Krung Thai Bank Pcl. (Managerial Position, Higher Level), 2016 - 2017 Executive Vice President - Sector Head, Foreign Affairs Division, Office of Corporate Banking Sector 3, Corporate the Permanent Secretary, Ministry of Banking Group 1, Krung Thai Bank Pcl. Digital Economy and Society 2558 - 2559 Executive Vice President - Sector Head, 2013 - 2018 Director of Personnel Division Corporate Banking Sector 2, Corporate (Managerial Position, Higher Level), Banking Group 1, Krung Thai Bank Pcl. Information and Communication Technology Center, 15. Mr. Pichit Jongsaliswang Office of the Permanent Secretary, First Executive Vice President - Ministry of Public Health Head of Retail Strategy Product & Segmentation Group Age 39 14. Mr. Kittipat Peantham Date of Appointment First Executive Vice President - April 9, 2019 Head of Government & State Enterprise Relations Group Education Age 54 • MBA Kellogg School of Management, Date of Appointment Northwestern University, USA October 9, 2018 • Bachelor of Science in Commerce McIntire, School of Education Commerce Charlottesville, VA University of Virginia, USA • Master of Business Administration (Financing), Training Program National Institute of Development Administration • The Anti-Money Laundering and the Counter-Terrorism • Bachelor of Accountancy (Auditing), and Proliferation of Weapon of Mass Destruction University of The Thai Chamber of Commerce Financing (AML/CTPF) (2019) Training Program • Identity Determination and Desirable Behavior • Digital Transformation for CEO (2020) Management • The Anti-Money Laundering and the Counter-Terrorism Number of Shares in company None and Proliferation of Weapon of Mass Destruction % of Shares in company None Financing (AML/CTPF) (2019) (Not changed since January 1, 2020) • Identity Determination and Desirable Behavior Family Relationship with Director and Executive officer None Management Position in Non-Listed Companies/Other Organizations • Executive Talk 2019 2019 - Present Director, Krungthai Card Pcl. • GTB & Government Integrated Strategy to Digital Positions in Non-Listed Companies/Other Organizations Platform 2020 - Present Director, • Leadership Succession Program, Institute of Research Krungthai-AXA Life Insurance Pcl. and Development for Public Enterprises (IRDP) (2018) Annual Report 2020 033

2019 - Present Member of Investment Committee, Experience over Past 5 Years Private Equity Trust for SME Growing 2014 - 2019 Executive Vice President - Sector Head, Together 1 Retail Loan Factory Sector, Retail Shared 2019 - Present Member of Investment Committee, Services Group, Krung Thai Bank Pcl. Private Equity Trust for SME Growing Together 2 17. Mr. Panabhand Hankijjakul Experience over Past 5 Years First Executive Vice President - Apr. 2019 - Oct. 2019 Advisor to the President, Head of Internal Audit Group Krung Thai Bank Pcl. Age 57 2018 - Jan. 2019 Director, Nestifly Co., Ltd. Date of Appointment 2015 - 2017 Advisor to the President, March 2, 2020 Krung Thai Bank Pcl. Education 2013 - 2015 Executive Vice President, • Master of Economics, The University of Kansas, USA Head of SME Segment, TMB Bank Pcl. • Bachelor of Economics, University of the Thai Chamber of Commerce 16. Mr. Chanchai Sinsuparatn Training Program First Executive Vice President - • Introduction to Thai Financial Reporting Standards 9 Head of Retail Shared Services Group (TFRS 9) (2020) Age 57 • Audit with New Normal (2020) Date of Appointment • Design thinking: Credit Process to Enhance December 1, 2019 Productivity-Efficiency (2020) Education • Procedures for Dealing with Cyber Threats that Come • MBA, Ramkhamhaeng University in The Form of Phishing Email (Phishing Email Process) 2019 • Bachelor of Arts, Ramkhamhaeng University • Personal Data Protection Act B.E. 2562: PDPA (2019) Training Program • The Anti-Money Laundering and the Counter-Terrorism • e-Government Program for Chief Executive Officer, and Proliferation of Weapon of Mass Destruction Class 7 Financing (AML/CTPF) (2020) • Personal Data Protection Act B.E. 2562: PDPA (Updated) • Introduction to Personal Data Protection Act B.E. 2562: (2020) PDPA (2019) • IFRS9 Preparation for Executives (2019) • Digital Leadership for Executive 2019 • The Anti-Money Laundering and the Counter-Terrorism • Identity Determination and Desirable Behavior and Proliferation of Weapon of Mass Destruction Management 2019 Financing (AML/CTPF) (2019) • Fostering Best Corporate Governance Practices (2018) • Declaration of Assets and Liabilities of the State • Workshop Loan Process (2018) Officials to the National Anti-Corruption Commission (2019) • The Sustainable Krungthai Initiative for Sustainable • Digital Transformation in Banking for Executive (2019) Risk Management (2018) • Insights into Debt Collection Act (latest version), • Cyber Security Awareness (2018) the Notifications of the Office of the Consumer • Leadership Performance Development (2017) Protection Board B.E. 2561(2018) and Accurate Practices • Behavioral Economics for Financial Institution for Hire Purchase and Leasing Business (2019) Managers (2017) • Executive Brand Solicitation (2016) • Annual Audit Committee CAACC (2017) • Executive Leadership Development Program (ELDP) • Thailand 4.0: Drive Organizations to Success (2017) 2015, Compass Institute, LEAD Business Institute and • Leaders as Coach (2017) Cornell University • Leadership Development Program for Executive (2016) Number of Shares in company None • Dealing with Fintech (2016) % of Shares in company None • Top Team Workshop (2016) (Not changed since January 1, 2020) • Credit Rating Workshop (2016) Family Relationship with Director and Executive officer None • Executive Brand Solicitation, Krung Thai Bank Pcl. (2016) Position in Other Listed Companies None Number of Shares in company None Positions in Non-Listed Companies/Other Organizations % of Shares in company None 2019 - Present Director, KTB Leasing Co., Ltd. (Not changed since March 2, 2020) 2019 - Present Director, KTB General Services and Family Relationship with Director and Executive officer None Security Co., Ltd. 034

Position in Other Listed Companies None 19. Mr. Chalerm Pradidarecheep Position in Non-Listed Companies/Other Organizations None First Executive Vice President - Experience over Past 5 Years Head of Retail Banking Sales and Distribution Group 2014 - 2020 Executive Vice President- Head of Age 57 Credit Risk Management Sector, Date of Appointment Risk Management Group, Krung Thai Bank Pcl. October 1, 2020 Education 18. Mr. Krit Chamapisit • Master of Public and Private Management, First Executive Vice President - National Institute of Development Administration Head of Communication and Branding Group • Bachelor of Science, Kasetsart University Age 50 Training Program Date of Appointment • Digital CEO (2020) October 1, 2020 • Thailand HR Forum 2020 (Virtual Conference) (2020) Education • Service requirement for operation (2020) • Master of Marketing, Thammasat University • Digital Enablement Program (2020) • Bachelor of Accounting, Chulalongkorn University • Workshop Retail Branch Strategy (2020) Training Program • Ransomware: Ransom Malware 2020 • General Management, DUKE University, USA • The Anti-Money Laundering and the Counter-Terrorism • Innovation Workshop (2020) and Proliferation of Weapon of Mass Destruction • Personal Data Protection Act B.E. 2562: PDPA (Updated) Financing (AML/CTPF) (2020) (2020) • Innovation Workshop (2020) • The Anti-Money Laundering and the Counter-Terrorism • Introduction to Thai Financial Reporting Standards 9 and Proliferation of Weapon of Mass Destruction (TFRS 9) (2020) Financing (AML/CTPF) (2020) • Personal Data Protection Act B.E. 2562: PDPA (Updated) • Introduction to Thai Financial Reporting Standards 9 (2020) (TFRS 9) (2020) • The Anti-Money Laundering and the Counter-Terrorism • Ransomware: Ransom Malware 2020 and Proliferation of Weapon of Mass Destruction • Cyber Security Awareness (2019) Financing (AML/CTPF) (2019) • Procedures for Dealing with Cyber Threats that Come • Identity Determination and Desirable Behavior in The Form of Phishing Email (Phishing Email Process) Management 2019 2019 • Procedures for Dealing with Cyber Threats that Come • The Anti-Money Laundering and the Counter-Terrorism in The Form of Phishing Email (Phishing Email Process) and Proliferation of Weapon of Mass Destruction 2019 Financing (AML/CTPF) (2019) • Introduction to Personal Data Protection Act B.E. 2562: • Identity Determination and Desirable Behavior PDPA (2019) Management 2019 • Cyber Security Awareness Number of Shares in company None • Leadership Performance Development (2017) % of Shares in company None Number of Shares in company None (Not changed since October 1, 2020) % of Shares in company None Family Relationship with Director and Executive officer None (Not changed since October 1, 2020) Position in Other Listed Companies None Family Relationship with Director and Executive officer None Position in Non-Listed Companies/Other Organizations None Position in Other Listed Companies None Experience over Past 5 Years Position in Non-Listed Companies/Other Organizations None Nov. 2018 - Sep. 2020 Executive Vice President - Head of Experience over Past 5 Years Communication and Branding 2018 - 2020 Executive Vice President - Head of Sector, Communication and Metropolitan Business Center Sector 2, Branding Group, Krung Thai Bank Pcl. Retail Banking Sales and Distribution Group, 2018 - Nov. 2018 Advisor to the President, Krung Thai Krung Thai Bank Pcl. Bank Pcl. 2017 - 2018 Senior Vice President - Head of Metropolitan 2011 - 2018 Senior Director - Head of Corporate Business Center Sector 2, Retail Banking Sales Marketing & Channel Management and Distribution Group, Krung Thai Bank Pcl. Division, Siam Commercial Bank Pcl. Annual Report 2020 035

2015 - 2017 Senior Vice President - Regional Office Number of Shares in company None Manager, Suan Mali Regional Office, % of Shares in company None Metropolitan Business Center Sector 1, (Not changed since October 1, 2020) Retail Banking Sales and Distribution Group, Family Relationship with Director and Executive officer None Krung Thai Bank Pcl. Position in Other Listed Companies None Position in Non-Listed Companies/Other Organizations None 20. Ms. Suwanna Anantanond Experience over Past 5 Years First Executive Vice President - 2015 - Oct. 2020 Executive Vice President - Head of Head of Credit Restructuring and Asset Management Group Corporate Banking Sector 6, Age 47 Corporate Banking Group 2, Date of Appointment Krung Thai Bank Pcl. October 1, 2020 2015 - Sep. 2015 Senior Vice President - Head of Education Corporate Banking Sector 6, • Master of Business Administration, Corporate Banking Group 2, Thammasat University Krung Thai Bank Pcl. • Bachelor of Business Administration, Chulalongkorn University 21. Mr. Pativate Santavanond Training Program First Executive Vice President • Digital Transformation in Banking & CBC2 Age 59 2020 Strategic Plan (2020) Date of Appointment • Credit Restructuring and Debtors Management October 1, 2016 Techniques (2020) Education • Corporate Restructure (2020) • MBA - Finance, Webster University, USA • Personal Data Protection Act B.E. 2562: PDPA (Updated) • BA - Economics, Thammasat University (2020) Training Program • Procedures for Dealing with Cyber Threats that Come • The Disciplinary Procedure and Civil Liability of in The Form of Phishing Email (Phishing Email Process) 2019 Employee (2018) • IFRS 9 Preparation for Executives (2019) • One on One Executive Coaching (2018) • Crucial Conversation (2019) • Capital Market and GM Product Solution (2018) • Reimaging Your Business for the Digital Age (2019) • Inspirational Leadership (2017) • The Sustainable Krungthai Initiative Day Seminar (2019) • Optimizing Leadership Program (2017) • Introduction to Personal Data Protection Act B.E. 2562: • Digital Banking & Inspirational Leadership (2016) PDPA (2019) • Executive Brand Solicitation (2016) • Identity Determination and Desirable Behavior • Executive Leadership Development Program (ELDP) Management 2019 2015, Compass Institute, LEAD Business Institute and • Personal Data Protection Act B.E. 2562: PDPA (2019) Cornell University • Fostering Best Corporate Governance Practices (2018) • TLCA Executive Development, Listed Companies • The Sustainable Krungthai Initiative to Drive Association Thailand, Stock Exchange of Thailand, and Prototypical Moral Bank (2018) Capital Market Academy (2013) • 2002 ISDA Master Agreement (2018) Number of Shares in company 4,000 Shares (held by spouse) • Storytelling for Leaders (2018) % of Shares in company 0.00003% • Leading at the Speed of Trust (2018) (Decreased 63,000 Shares from January 1, 2020) • Extended DISC (2017) Family Relationship with Director and Executive officer None • The 7 Habits of Highly Effective People (2017) Position in Other Listed Companies None • Leadership Performance Development (2017) Position in Non-Listed Companies/Other Organizations • Leaders as Coach (2017) 2018 - Present President, Krung Thai IBJ Leasing Co., Ltd. • The Sustainable Krungthai Initiative, ONE KTB: Experience over Past 5 Years The Future of Banking (2017) 2015 - 2018 Director, Krung Thai IBJ Leasing Co., Ltd. • Accounting Standards and Financial Reporting 2016 - 2018 First Executive Vice President - Head Standards (2016) of Business Center Group, • Supply Chain Workshop (2016) Krung Thai Bank Pcl. • Digital Banking & Inspirational Leadership (2016) 2557 - 2559 Executive Vice President - Director, • Situational Leadership for Top Leaders (2016) Metropolitan Business Center Sector 1, Krung Thai Bank Pcl. 036

Business Environment

Global economy in 2020 severely contracted by

Economic Overview in 2020 and Outlook for 2021

The 2020 global economy faced the worst the global economy in 2020 to contract by 3.5 percent, which is recession in almost a century. Since the beginning of 2020, the most severe contraction since the Great Depression in the 1930s. humanity suffered from the outbreak of the novel coronavirus or Monetary policy around the world has been loosening COVID-19, that first originated in Wuhan city of China. Later, continuously since the beginning of the year. In particular, the it had rapidly spread to all over the world, causing many countries Federal Reserve System (Fed) cut policy interest rates to 0.00-0.25 to strictly enforce the outbreak control measures along with percent shortly after the outbreak, including releasing quantitative urging people to change their lifestyle to the New Normal method easing measures (QE) unlimitedly. In the same way, the European in the attempt to reduce the risk of person-to-person disease Central Bank (ECB) and the Bank of Japan (BOJ) employed QE transmission. Due to the COVID-19 pandemic, many countries measures to inject massive amounts of liquidity into the economy, have encountered economic downturn in the second quarter while also signaling financial easing to facilitate future economic of the year. However, the recession began recovered slowly recovery. On the other hand, in 2020, high liquidity in the system during the third quarter after relaxation of outbreak control resulted in a considerable rise of the asset price in the capital measures, together with the progress of vaccines development. market during the second quarter of the year amid the slow Nevertheless, a new wave of COVID-19 pandemic had surged economic recovery and the all-around uncertainty. around many countries again in late 2020. Apart from the outbreak, there were other factors affecting the economy Fed cut policy throughout 2020, such as the US presidential election and the interest rates to United Kingdom’s withdrawal from the European Union (Brexit). Overall, the International Monetary Fund (IMF) speculated 0.00% 0.25% Annual Report 2020 037

The global economic recovery in 2021 depends In 2021, largely on the effectiveness and the acceleration of the global economy COVID-19 vaccine distribution. According to the IMF, the global economy is projected to grow by 5.5 percent, similar to is projected to grow by global trade volumes (of products and services) that is expected to grow by 8.1 percent. This depends mainly on the effectiveness and the acceleration of vaccine distribution, along with the monetary policy easing and the amount of money from fiscal 5.5% measures to support the economic recovery. Nonetheless, the global economy is still facing high uncertainty from many factors, whether the second wave of COVID-19 outbreak; the Great Reset context which will place more emphasis on environmental This depends mainly on the effectiveness and and sustainability issues; the new US president’s trade policy and the acceleration of vaccine distribution the conflicts against China; China’s five-year strategic plan which focuses more on technological self-reliance; as well as the results of the Regional Economic Partnership Agreement (RCEP), the largest free trade area to be enforced in the middle of this year. All of these factors play an important role in shaping the global economy and society. 038

The year 2020 saw the worst Thai economic The economic recession had a broad impact, which contraction since the Tom Yum Kung Crisis in 1997. prompted the government to implement measures to assist Thai economy shrank by 6.1 percent mainly due to the COVID-19 affected business sector and people, covering public health pandemic, which leaded to the tight outbreak control measures measures, relief and compensation measures, as well as economic during the second quarter. The measures were, for example, and social recovery measure through the Emergency Decree temporary shutdown of businesses, restricting domestic and Authorizing the Ministry of Finance to Raise Loans to Solve Problems, international travel, as well as the production halting of industrial to Remedy And Restore the Economy And Society as Affected products in foreign countries, which also caused the domestic by the Coronavirus Disease Pandemic, B.E. 2563 (2020), with production to stop. Regarding the situations, the economy in the loan limit of not more than 1 trillion Baht. Furthermore, other the second quarter contracted by 12.1 percent correspondingly. budgets were allocated to numerous projects such as the No One Despite outbreak control measure relaxation in the second half Will Be Left Behind (Rao Mai Ting Kan) scheme, We Travel of the year, the economy was unable to recover much due to Together (Rao Tiew Duay Kan) campaign and Let’s Go Halves the lack of revenues from foreign tourists. As a result, the number (Kon La Khreung) scheme. As for the Bank of Thailand, it cut of foreign tourists throughout the year totaled to approximately the policy rate to 0.50 percent, which marks the lowest rate 6.7 million people, which almost all of them had been visiting in on record, along with reducing the remittance rate of contributions the first quarter of the year, decreasing from 39.9 million people to the Financial Institutions Development Fund to allow of the previous year. Therefore, small and medium enterprises the financial institutions to reduce interest rates. Additionally. were severely affected. In the meantime, the number of workers It also set up funds to maintain liquidity for fund raising in the bond who became unemployed or had fewer working hours greatly market and imposed measures with other financial institutions increased. to assist debtors, such as debt restructuring, debt payment suspension and postponement, together with providing soft loans. Annual Report 2020 039

Thai economy in 2021 is likely to recover gradually, at 0.50 percent. However, financial conditions may be volatile however, there is still high uncertainty due to external amid the good news of the progress of vaccination in many demand from foreign countries. Opening for foreign tourists is countries, causing risk-on sentiment of investors. Consequently, expected to begin, but it depends on the ratio of the vaccinated there may be more foreign and domestic cash outflow invested population from both national and overseas. As for the export in safe haven assets and more cash inflow invested in emerging sector, it is anticipated to recover in consistent with the global markets and also in Thailand. This shall result in US Dollars economic outlook despite the container shortage problem and depreciation and Thai Baht appreciation in this year more than the increasing freight rate in the beginning of the year. Concerning other currencies in the region due to consistent current account to domestic factors, a new wave of COVID-19 pandemic in surpluses. the country since the beginning of December 2020 results in a slowdown in domestic demands, especially domestic tourism which is the main engine of the recovery. The level of impact mainly relies on the efficiency in controlling the number of new infection cases within the country, along with the effectiveness and the acceleration of vaccine distribution. Therefore, Thai economy in 2021 has a chance of expanding below 3.2 percent Thai economy in 2021 as estimated by the Bank of Thailand in December 2020. has a chance of The economic recovery, which is likely to prolong, leads to expanding below the expectation that the government’s economic recovery measures will also continue only for the compulsory. As for monetary policy, the policy interest rate is projected to be fixed 040

Policy and Business Overview

1. Overview of the Bank’s Operation and The Board of Directors has monitored the Bank’s performance Objective Plans Progress in 2020 compared to monthly key performance indicators and has Regarding the current business competition and the disruption tracked the Bank’s progress of the key projects and performance in terms of rapid and severe changes in technology, competitors, compared to quarterly key performance indicators and government organizations and consumer behavior as well as the peers’ performance during the year. In addition, the Board challenges from volatility factors such as the slowdown in the of Directors gave the policy, strategy and suggestions to domestic and global economies, the higher household debt the Management through the Board of Director meetings. problem and the COVID-19 outbreak, the Bank had to adapt Consequently, after the Management had taken such advice to keep up with the situation in order to respond to the needs into the process, the Management had to report the progress of customers and shareholders along with being able to cope and the accomplishment at the meeting regularly. with these changes. The Bank altered its business operations In order to achieve the statement of direction, vision and through a parallel strategy (2 Banking Model) by enhancing mission that focus on elevating people’s well-being and providing traditional business efficiency (Carrier Model) along with new them with the economic opportunities and greater access to business operations (Speedboat Model) that emphasizes data financial services, including maintaining Bank’s competitiveness analytics on digital platforms in an attempt to strengthen as a leading commercial bank of the country, regarding more the Bank and its competitiveness. Recently, the Bank supported rapid and severe disruption in 2020, Krungthai Bank therefore the government in advocating the Thailand 4.0 policy through stipulated 2 approaches to drive the organization concurrently: the development of a digital platform for people in all sectors Carrier and Speedboat. to have access to the financial services. As a result, it reflects 1. Carrier: The approach to drive key business of the Bank in reducing inequality and gaps in income distribution in the society, in terms of credit, deposit, fees and others, including the development helps enhancing digital literacy skills of Thai people in order to of Krungthai NEXT application to satisfy all customer needs. drive Thailand towards a truly cashless society and fulfills all needs 2. Speedboat: The approach focusing on creating of Thai people in all sectors. new business models and platforms in the manner of the open The Bank’s Board of Directors has attached great importance banking - platform that can simply connect with other platforms, to the review and stipulation of the policy framework, vision, e.g. Pao Tang application - so that the platform as an open mission, strategic plan and business plan, including monitoring financial system can support multiple e-wallets at the same time. the implementation and compliance of such matters in Moreover, the Blockchain technology has been equipped to an attempt to achieve the organization’s goals. In this regard, the platform and application, together with the backup by AI, the Bank organized the brainstorm meeting between the Bank’s Machine Learning and Data Analytics that can completely Board of Directors, the Management and the executives of understand and respond to all customer needs. Examples of affiliated companies to determine the strategic directions and wallets in Pao Tang application are G-Wallets of various important projects that will drive the business conglomerate government schemes such as Chim Shop Chai (Taste, Shop, to achieve its strategic goals. Subsequently, the Management Spend), Rao Tiew Duay Kan (We Travel Together), Khon La Khrueng exploited the opinions from the meeting to formulate the business (Let’s Go Halves), Health Wallet, Wallet SBM (Sasom Bond Mung plan of the Bank and proposed to the Board of Directors’ meeting Kung e-Wallet), wallet for service features of the Student Loan for approval. In this regard, the Management communicated Fund (SLF), etc. The main objective is to facilitate all Thai people the Bank’s strategic plan, business plan and important goals to have access to financial transactions more conveniently. to employees in the organization thoroughly. For example, the Bank The Bank continues to place importance to the 5 Ecosystems, held KTB Business Strategy Seminar annually with the intention which are its main target groups. The first group is the Government. that the executives, Branch Managers, Regional Office Managers The Bank is entrusted to oversee the connection of Government and FVP Department Heads or higher, can be acknowledged Fiscal Management Information System to electronic system, about management policies and directions, including Thai connection of the financial services from the government to economic tendency and change in business environment. the people, as well as being a mechanism for pushing significant As a result, the participated executives shall have guideline policies of the country. The second group is Payment. The Bank to initiate proactive operations in order to achieve the organization’s has developed a full-fledged payment innovation, which is goals and passed the strategies to the employees in the departments a digital platform that responds to different lifestyles of customers. accurately under the same direction. Additionally, the Bank held The third group is Health and Wellness. The Bank has expanded the Board of Directors’ mobile meetings and visited the its financial services, provided a payroll service and an automatic departments and branches in each region regularly to delegate money transfer payment system for partners and elevated services the significant policies and strategies in various aspects as well as to Smart Hospital. The fourth group is Education. The Bank has getting to know the problems caused by the operations of the developed the University Application to be a platform that employees closely. connects all dimensions of student’s life in the digital age. Annual Report 2020 041

The last group is Mass Transit. The Bank has developed a cashless 35,000 EDCs at Blue Flag Shops and installed Thung Ngern fare payment system for different types of transportation. Pracharat application at more than 50,000 Blue Flag Shops. Accordingly, the Bank deems that 5 ecosystems are its key • Cooperation with government units of Ministry of strengths; therefore, the Bank shall sustain and maintain, then Finance to use blockchain technology: The Bank has cooperated connects them to other ecosystems in order to fulfill daily with government units in the Ministry of Finance to implement requirements of the customers. projects using blockchain technology with the purpose to elevate Due to Krungthai Bank’s ability to build a large customer IT infrastructure for supporting the missions of units in the Ministry base through the implementation of various financial infrastructures of Finance i.e., the Comptroller General’s Department, of the government, it will empower the Bank to expand many the Revenue Department, the Excise Department, the Customs businesses. One of them is business expansion from customers’ Department and the Public Debt Management Office, etc. partners (X2G2X): It starts from the Bank’s main customers, then To be precise, the Bank encourages using blockchain to develop links to the business sectors of customers’ partners, namely working systems for government revenue collection, finding funds distributors, community enterprises, retail shops, restaurants, hotels, and property management and bidding as well as improving car rental businesses and others in the supply chain. All of them the efficiency of the work systems, reducing work procedures and are connected with the efficiency of technology and enter into performing fast, secure, transparent and auditable operations. the Bank’s ecosystem. It enables the Bank to provide financial In 2020, Krungthai Bank under the collaboration with government services that truly respond to all their needs. In this regard, units in the Ministry of Finance have executed the projects using all of this will pave the way for the establishment of the Thailand blockchain technology as follows: Digital Platform for Thais in the near future. 1. VAT Refunds for Tourists: The Bank has cooperated Examples of the important products and services related to with the Revenue Department, the Thai Customs and 5 ecosystems in 2020 are as follows: the Immigration Bureau to launch and apply blockchain technology 1. Government for value-added tax (VAT) refund via mobile application • Government Welfare Card: The Bank joined with (Application Thailand VRT) for the first time in the world. Tourists the Comptroller General’s Department for developing Government can request for VAT refund at 10 international airports and Welfare Card and distributed about 11.6 million cards to can request from VAT refund service agents for travelers departing low-income earners at the end of 2018. The Bank had issued additional the Kingdom of Thailand to the city approved by the Revenue government welfare cards under Thai Niyom Yung Yuen Project Department. In addition, the Bank has jointly developed a web in 2019 for disabled people, elderly people, bed-ridden patients application system to enable paperless function in verifying or those people who cannot travel for a registration in 2017 information and confirming status of the products that have been amounting to more than 3 million people in 2020. The objective taken out of the country as well as opening an API (Application was to reduce cost of living, consumption expenses (cost of Program Interface) for merchants to send information utilities and discount on the purchase of LPG) and cost for public on purchases of goods and services of tourists into the system transportation. The Bank also participated in economic stimulus for VAT refunds with the Revenue Department, which was considered assistance measures and urgent economic stimulus package to to be the complete digital development of the VAT refund system. assist more than 14.6 million low-income earners. The electronic VAT refund system will facilitate for more Currently, there are remaining of 13.9 million government convenience, shorten the processing time, reduce government welfare cardholders in the system from formerly 14.6 million service costs, increase the tourist satisfaction as well as contribute cardholders, since more than 600,000 cardholders have passed to promoting and supporting Thailand’s tourism in the future. away. The government has supported the budget to help 2. Government Procurement (e-GP): The Bank low-income earners who held government welfare cards amounting cooperated with the Comptroller General’s Department to enhance to over 43 billion Baht in 2018, over 93 billion Baht in 2019 and the government procurement system. There are 2 sub-projects over 47 billion Baht in 2020. However, for 2021, the budget as follows: is estimated to be amounting to 54 billion Baht. The Ministry of 1) e-LG is the issuance of an electronic Letter of Finance is expected to provide new registration of low-income Guarantee for entrepreneurs in the e-GP system, which can be earners to attain additional government welfare cards in 2021. approved within 5-10 minutes, formerly taking more than In this regard, the registration will consider the household income 4-5 days for an approval. It will help reduce the working process and of the eligible cardholder instead of the former criteria, which entrepreneur’s collateral audit as well as generate confidence based on the personal income of each cardholder not exceeding that the pledged collateral is secure. The entrepreneurs can request 100,000 Baht a year. e-LG at all banks and via the blockchain system. • Blue Flag Shops and Thung Ngern Pracharat Mobile 2) e-Credit Confirmation of e-GP collects profiles Application: This is to increase channels for Government Welfare of entrepreneurs, juristic persons, including rating system Card usage and to reduce cost of living for citizens according to based on the entrepreneurs’ performance in working with the government policies. In 2020, the Bank installed more than the government sector. It can help saving time for preparing 042

documents for registration and bidding, increase the efficiency and the Office of the Court of Justice have a plan to develop and enhance transparency of procurement system, which drives the system to cover criminal cases and cases in the specialty budget usage to boost the economy. courts as well as linking information to the Legal Execution 3) Wallet SBM (Sasom Bond Mung Kung e-Wallet): Department after the court ruled in order to support the service The Bank cooperated with the Public Debt Management Office to the people widely and faster in every step. to develop the Sasom Bond Mung Kung e-Wallet on Pao Tang • One-stop financial services for the Royal Thai Army: mobile application to support Thailand’s first digital bond trading. The Bank and the Royal Thai Army signed an agreement on The pilot subscription was the Ministry of Finance’s Special Savings providing financial services, personnel rights service, granting Bond FY. B.E. 2563 “Wallet SBM” (Scripless Bond), a 3-year maturity loans for officers’ welfare and service for the Royal Thai Army’s bond with fixed interest rate at 1.70% p.a. in a total issuance operation system development scheme (the army’s savings and approximately 200 million Baht. The bond subscription was welfare). The Bank will provide a full range of financial services conducted in real time manner. In particular, the buyer can view such as bank accounts, electronic cards and welfare loans for purchase information, check the purchase history, download military officers and personnel who use Krungthai Bank accounts documents as well as receiving interest and principal redemption as a payroll account in receiving direct salary from the Comptroller via the wallet. The bonds were sold out in just 99 seconds, with an General’s Department. These full-fledged services were provided average investment of 145,560 Baht per person and there was to increase the efficiency of the Army’s budget and financial a total of 1,347 buyers from 76 provinces nationwide. Regarding operations as well as improving the quality of life of the the second time of subscription for Special Savings Bond FY. B.E. 2563 government officials. “Wallet SBM” No.2, a 4-year maturity bond with fixed interest rate • Treasury e-Auction: The Bank and the Treasury of 1.70% p.a. in a total issuance 5,000 million Baht, it reached to Department signed a memorandum of understanding to develop more than 20,000 interested investors, aged from 15 years old an auction platform for assets seized by courts as state properties to 99 years old, with the average investment amounting to 333,000 Baht by developing the Treasury e-Auction website, which is an online per person. Specifically, most of the bondholders were in auctioning platform that facilitates the users to place their bids the early-working age and before retirement age. For the 2nd in real time from any place and any time as well as providing subsription, there was a distribution in terms of number of investors, transparency to users. The website has been designed to be age of investors, average investment amount and investor residences, compatible with multiple devices and support multiple payment which reflected the success of digital technology applied to methods, including direct debit via Krungthai Bank account, credit financial transactions. In details, it was easily accessible for all and debit cards, QR code payment or bill payment. Users can save investors from every investment level across all regions. The electronic their interested assets into favorites list and users are able to select bond subscription satisfied the requirements of investors very well the desired price range. The website will display the rank of and promoted savings effectively. In addition, the Bank has also the latest auction result as well as alerting users when the highest bid developed the Waller SBM or e-Wallet to be able to sell bonds on price changes and when the bid time is almost over. The Treasury the secondary market 24 hours a day as an option for customers e-Auction system will support efficient asset management and who do not wish to wait for a redemption when the bonds reach generate income back into the government together with providing maturity as well as being able to buy bonds without having to wait credit services from Krungthai Bank to the bid winners. for the period of selling bonds. This will increase the liquidity of • Financial assistance measures and the support to government bonds, including promoting financial and capital the government’s economic stimulus measures to help customers market of the country. and citizens impacted from the COVID-19 outbreak: Regarding • e-Filing Court: The Bank joined hands with the Office the economic crisis and the COVID-19 pandemic, both retail of the Court of Justice to develop and launch e-Filling service, and corporate customers of the Bank have been affected from which supports the trial of civil cases. The e-Filling Court is a new the situation differently. The Bank has expedited to assist all groups option that allows lawyers to file a petition and appeal without of customers by participating in the Bank of Thailand’s credit going to court. Defendants can also file an affidavit, request assistance measures for debtors affected by the COVID-19 a photocopy and view the case documents. Meanwhile, pandemic, measures of the Ministry of Finance to assist court officials can also examine petitions and appeal as well as entrepreneurs, including the issuance of various measures of giving opinions in the system. Judges can consider to order the Bank in order to remedy, help and alleviate the troubles of the indictment via the system as well. In addition, the system allows the customers who are directly or indirectly affected by the COVID-19. the litigant to keep up with the case at all times and facilitates Example of those measures are the suspension on principal and the users of the e-Filing system to pay court fees 24 hours a day. interest payment, lowering interest rates, lowering interest rate In 2020, there are more than 150,000 lawsuits that have been ceiling, reducing service fees and penalties, expanding credit filed through the system and more than 10,000 lawyers nationwide line and installment period, debt restructuring, supporting have registered in the system. The e-Filling Court responds to new loan (soft loan), participating in DR BIZ program, etc. the mission of developing and building a system to facilitate justice In 2020, Krungthai Bank has provided financial assistance to be fast, convenient, up-to-date and international. The Bank to entrepreneurs/debtors through various assistance measures, Annual Report 2020 043

equivalent to more than 400,000 million Baht of credit line of the Rao Tiew Duay Kan scheme implementation from 15 July 2020 and covering more than 100,000 entrepreneurs and debtors. to 1 January 2021, it is found that there are currently Most of them were retail debtors and small SMEs entrepreneurs. 7.3 million registered tourists, more than 8,500 registered hotel and Nevertheless, Krunghai Bank, as a state commercial bank, accommodation entrepreneurs, more than 67,000 restaurants, has also taken part as the government sector to expedite more than 2,000 tourist attractions, more than 1,300 OTOP shops assistance to the people through the development of digital and more than 200 spas or massage parlors and travel platform. In particular, the Bank facilitates Thai people the access transportation entrepreneurs joining in the campaign respectively. to various assistance measures of the government during The registered tourists made more than 5.1 million rights of hotel the COVID-19 outbreak situation. Major schemes of the government bookings (out of 6 million rights), worth over 13.6 billion Baht, that the Bank has been involved and executed are as follows: including spending more than 5.7 billion Baht via E-Voucher and 1. “Rao Mai Ting Kan” (No One Will Be Left Behind) more than 1 billion Baht worth for air tickets. Overall, no less than scheme: The Bank developed and supported the platform and 20 billion Baht has been circulated in the economy through this the processing system of the Rao Mai Ting Kan website in order scheme. that people, who are affected by the economic crisis of Covid-19 4. “Khon La Khrueng” (Let’s Go Halves) scheme: The such as temporary workers and self-employed individuals outside Bank in collaboration with the Ministry of Finance, the Fiscal Policy the social security system, can register to receive 5,000 Baht (for Office and the Comptroller General’s Department has executed 3 consecutive months). To support this scheme, the Bank sent out the Khon La Khrueng scheme. For almost 10 million qualified 6,500 employees nationwide under Rao Mai Ting Kan team people, the government co-pays for 50% of the price of food, to join the role of guardians in helping people to verify their beverages and general goods purchases up to 150 Baht rights. Moreover, the Bank also transformed branches all over per person per day or up to 3,000 Baht per person throughout duration the country as a service point to provide assistance, answer questions, of the scheme, totaling 30 billion Baht. The scheme aims take action to correct the information of the applicants to stimulate and restore local economy for small entrepreneurs, as well as being a complaint center of the applicants for a right especially hawkers and street vendors so that they can generate review in case the registrations are not successful or not eligible. more income from product sales, and to reduce the cost of living As a result, from key performance of the scheme, 15.3 million people of people. To support the scheme to be successful, Krungthai were eligible to receive remedies out of more than 28.8 million Bank has provided additional schemes and more actions registered people with a total amount of more than 170,000 as follows: million Baht of the subsidies. - Develop a registration system for the Khon La Khrueng 2. Thai Chana Platform Development: The Bank scheme via Krungthai Bank by expanding bandwidth in collaboration with the Centre for COVID-19 Situation to support high-volume registration of interested people Administration (CCSA) cooperatively developed the Thai Chana at the same time concurrently. The system supports Platform as a tool to help the investigation and tracking the registration of maximum 200,000 people at a time and of diseases happening accurately and quickly. Meanwhile, there is no limit on the number of registered users per day it also supports people and entrepreneurs to comply with - Increase additional channels for users to verify G-Wallet the relief measures effectively. For accumulated usage via identity via more than 3,000 Krungthai Bank ATMs www.ไทยชนะ.com since the start of the project in May 2020 nationwide. to December 2020, it has been found to there are more than - Facilitate the merchants and people who are interested 51 million active users and over 323,000 registered merchants. in participating in the scheme; the Bank has prepared 3. “Rao Tiew Duay Kan” (We Travel Together) the staffs to go on-site at the stores. The staff will visit campaign: The Bank in collaboration with the Ministry of Finance, communities and markets to provide suggestion and the Fiscal Policy Office and the Tourism Authority of Thailand invite people, especially the elderly, the hawkers and has carried out the Rao Tiew Duay Kan (We Travel Together) street vendors, to join the scheme. Besides, interested campaign. Starting since July 2020, subsequently the Cabinet shops can contact Krungthai Bank branches or inform had resolutions to extend the scheme period until 30 April 2021. the local authorities such as municipality, SAO etc. The government co-pays for accommodation at hotel room rate Then, local authorities will notify the Bank to proceed further. and air ticket price. The registered tourists will receive the subsidy - Expand types of qualified shops to cover local retail by refunding via the Pao Tang application, including an E-voucher shops, namely the village shops and shops in urban for discounts on food and entrance fees to the registered tourist community fund according to the Cabinet’s resolution. attractions. Its objective is to increase liquidity for tourism business The performance of the Khon La Khrueng scheme in the first entrepreneurs and stimulate the country’s economy. The Bank phrase during 23 October - 27 December 2020 found that more has been involved in the scheme by developing a digital than 1.1 million shops/vendors have registered to participate registration and payment platform through www.เราเที่ยวด้วยกัน.com in the scheme. Most of them are food and beverage shops, general and the Pao Tang application, which is the central stores and hawker stalls, including OTOP shops. More than application for receiving government subsidy. For the progress 9.5 million qualified people have generated accumulated spending 044

of more than 49 billion Baht, divided into registered individuals’ in order to become the full-scale digital banking that support spending of more than 25 billion Baht and the government’s all financial activities in the future. Examples of important co-payment of 24 billion Baht. technologies and features of new Krungthai NEXT are as follows: The said scheme contributes not only to the restoration of 1. Artificial Intelligence (AI) creates interactions with local economy through people’s consumption and expenditure users through smart transaction that learns and lists but also to the enhancement of digital knowledge for people, the most frequently used financial transactions; smart especially of the grassroots level, to be able to take advantage banner that will notify important items such as of technology to reduce inequality. In addition, this shall also insurance premium payments due, card renewal, enable Thai society to develop and move forward to the digital etc.; and smart promotion that offers special society concurrently. Meanwhile, since the scheme reduces the promotions for each individual. use of cash, therefore, its operations are likely to process faster, 2. Cloud Native Technology is 100% used by Krungthai more transparent and efficient. Bank, which is the first bank in Thailand. This consists From the success of the scheme, the Cabinet, thus, via of 3S technology: Scalability - to support large a resolution, has given an approval for the Ministry of Finance amounts of simultaneous financial transactions, to undertake the scheme in the second phase by dividing eligible Stability - to support stability and smoothness of use, individuals into 2 groups: and Security - to provide the maximum security 1) First-phrase registrants: Up to 10 million registrants will with world-class technology. get an additional 500 Baht on 1 January 2021. The amount 3. Biometric Verification can be enabled with face is increased from 3,000 Baht to 3,500 Baht and available authentication, i.e., verifying the identity of a person until 31 March 2021. using their face and identification card. 2) New registrants: Up to 5 million registrants will get 4. User Experience (UX) and User Interface (UI) meet a 3,500 Baht for spending during 1 January - 31 March 2021. all requirements and deliver a superior customer It is hoped that the Khon La Khrueng scheme in the second experience: Customers can set their profile picture phrase will mitigate the economic impact arose from and customize their homepage as they like, whereas the COVID-19 pandemic and continue to restore the local economy, the color themes will be automatically adjusted including driving the Thai economy to have continuous growth according to the time of the day or important and expansion until 2021. festivals, etc. 5. Covid-19 Vaccine for Thais campaign: The Bank 5. Key features of the top-up and payment services becomes the developer of the payment platform and that have the most comprehensive financial infrastructure for Chulalongkorn University to be able to transaction network in Thailand for both public and accommodate for the donation from 1 million people in private sector organizations are offered such as the “Vaccine for Thais” campaign, which is a collaboration between electricity bill, water bill, mobile phone bill, internet CU Enterprise Foundation by Chulalongkorn University and bill and traffic ticket payment service, etc. its partner organizations. This campaign has been launched to raise • Contactless ATM service: The Bank has developed funds to support Thai researchers to research, develop and and provided contactless functionality at more than 3,300 ATMs produce Covid-19 vaccines in Thailand (Thai vaccine for Thai and ATM+s nationwide. As the first bank in Thailand, this service people). It targets to raise 500 Baht from each of one million is available for the Krungthai debit cards with contactless symbol interested people. The donation started from 18 December 2020 and Government Welfare Card. Customers can withdraw money onward. The Bank’s prepared platform and infrastructure or ask for the balance instead of inserting a card. This increases are able to support donations from mobile banking applications convenience and safety for making transactions as well as of all banks. In case of no mobile banking application, the donation reducing the problem of forgetting to take out the card from can be made at more than 1,000 branches of Krungthai Bank the machine. nationwide. In addition, the banking system can track information • In-CAR Fast & Trust Experiences: The Bank in in real time. The system will be closed automatically when the cooperation with Bangchak Public Company Limited has donation reaches 500 million Baht. Besides providing the donation developed the In-CAR Fast & Trust Experiences project, in which platforms, the Bank participated in promoting the Covid-19 a payment can be made through a modern Mobile Android Vaccine for Thais campaign via various channels of the Bank EDC machine. Customers can make fast, standard and secure to invite people to donate, which support the production of payments. At the pilot of the project, this service is provided at the COVID-19 vaccine for Thai people. Bangchak gas station, Sukhumvit 62 Branch and Srinakarin 1 2. Payment Branch and will be available at all branches of Bangchak gas • New version of Krungthai NEXT: The Bank has adopted station in the future. For payments at Bangchak gas station, world-class technologies such as AI (Artificial Intelligence), Cloud customers can tap a card to pay immediately while sitting in Native, API (Application Program Interface), Biometric Verification, etc. their car. The data of the dispenser will be linked with the Mobile to develop new version of Krungthai NEXT application Android EDC machine. Payment amount, oil type and quantity Annual Report 2020 045

will be displayed automatically. Transaction time is less than with their ID card. More than 5,600 EDC machines were installed 1 minute, which increases convenience and speed. Lastly, it also at more than 1,300 public and private hospitals nationwide. reduces waiting time for services, worry about the misuse This makes the reimbursement of medical expenses fast, convenient of personal information and the exposure to cash. and transparent. In 2020, the government allocated a total • Services for payment of fees and taxes via EDC budget of 71 billion Baht for the Civil Servant Medical Benefit machines at offices of Departments of Lands: The Bank has Scheme and has increased the budget to 74 billion Baht in 2021 cooperated with the Department of Lands to install EDC (Electronic to subsidize this welfare scheme. Data Capture) machines at 461 Provincial Departments of Lands, • Smart Hospital: The Bank cooperated with hospitals branches and separate offices nationwide in order to increase under the Ministry of Public Health in the development of Smart fee and tax payment channels from previously paying by cash Hospital, which is the enhancement of the country’s public health or cashier’s cheque to pay with debit or credit cards or system as well as becomes the prototypical model for hospitals scanning QR Code via mobile applications of all banks. across the country. The Bank, together with many state hospitals, The service will help promote a cashless society, reduce the burden provided a complete solution by integrating technology with of the people and complexity of paying cash as well as being services, for examples, self-check-in, automatic physical able to check payment results from the bank’s system immediately. examination machine and intelligent AI chat bot to help screen • Government Lottery prize claim at Bank’s branches: patients by using voice control system. In addition, Telemedicine The Bank has been entrusted by the Government Lottery Office which is a treatment guideline consultation is provided for patients to appoint the Bank as a representative for the government who need to see a medical specialist through a video conference. lottery and charitable lottery prize claim service through its Other examples of integration of technology and services includes branches nationwide. People who won the government lottery HIE Blockchain service, a basic database management for are able to bring a winning lottery and their identity card to exchanging patient information between medical service contact any Krungthai Bank branch in person and claim departments, Self-Payment system that patients can check before all winning prizes, excepting the first prize that must be claim at payment in real time on the eligibility of medical treatment right, the Government Lottery Office. The Bank will only pay the prize whether from the National Health Security Office (NHSO), for the recent round of prize announcement. For the government the Universal Coverage Scheme (UCS), Social Security Right and Civil lottery winnings, the service fee, including VAT is charged only Servant Medical Benefit. Besides, patients can choose to pay 1% and the stamp duty 0.5% of the prize value. For charitable their medical expenses by cash, debit card, credit card lottery winnings, 1% fee and 1% withholding tax of the prize value or scanning a QR code via Krungthai NEXT application and are charged. The lottery winner can select to receive money other banks. This increases convenience and reduces risks in various forms such as transferring money to Krungthai Bank and complication of hospital’s cash management. In 2020, account or other banks’ account or cashier’s cheque, which the Bank has cooperated with many hospitals, such as Samutprakarn facilitates and increases the winner’s safety of claiming prize. Hospital, Somdech Phra Pinklao Hospital in order to support • Appointing Thailand Post as banking agent: The the hospitals to be a smart hospital. Bank appointed Thailand Post as its official banking agent • Health Wallet via Pao Tang Application: The Bank, to elevate the capability of providing financial services to cover in cooperation with the National Health Security Office (NHSO), all areas around the country. With more than 1,200 Thai Post developed the Krungthai Digital Health Platform to facilitate Service points, 1,000 bank branches and more than 10,000 ATMs, the gold-card subscribers in health care scheme and people granted the Bank finally has a total of 13,000 service points nationwide, with right under the Health Promotion and Disease Prevention which increases convenience for customers. At present, Thailand (P&P) in accessing healthcare service, which is the government’s Post is the banking agent of the Bank for providing deposits medical right granted to Thai people by taking care of their service to Krungthai Bank accounts nationwide and the traffic health from birth to the elderly, through Health Wallet on fine ticket payment service. In addition, Thailand Post supports Pao Tang application. The NHSO has allowed 15,000 reservations for entrepreneurs who are customers of Krungthai Bank to open influenza vaccination through the Health Wallet and provided distribution channels through the application and website: other health promotion and prevention rights for another 16 items www.thailandpostmart.com, a marketplace that distributes goods such as HPV vaccine, family planning, contraception, and and products from all over Thailand. colorectal cancer screening, etc. In particular, these medical 3. Health and Wellness and health services are available for the gold-card subscribers • Civil Servant Medical Benefit Scheme (CSMBS): The living in Bangkok. The eligible healthcare cardholders can book Bank collaborated with the Comptroller General’s Department an appointment in advance for receiving medical services in the execution of the Civil Servant Medical Benefit Scheme at 346 hospitals, medical centers, health care units in Bangkok. (CSMBS) for more than 4.7 million civil servants and their families. After checking location, history of rights claimed with QR Health ID The Bank changed the direct healthcare reimbursement system that verifies the identity instead of the ID card, the healthcare for civil servants and their families as the outpatient from cardholder can instantly make payment of excess charges that the traditional method to making transactions via EDC machines are not include in eligible rights through Health Wallet. It helps 046

provide convenience and safety for people. Furthermore, Health verify identity and use instead of student or staff ID card, scanning Wallet also enables the government to provide fast and accurate QR Code to check the attendance in class, checking the bus medical benefits directly to each eligible individual, as well as schedule, updating news and events, notification of class schedule being a part in enhancing the country’s public health system. or class cancellation. The student can register for each semester 4. Education anywhere. Moreover, the application also provides cashless • Student Loan Fund (SLF): The Bank has been entrusted payment for products and services while students making payment by the Student Loan Fund to manage student loans since 1996 via U APP can enjoy the benefits at their choices and according until present. Krungthai Bank and SLF signed the agreement to their lifestyle. Besides, the Bank has also established an electronic to procure the Digital Student Loan Fund System (DSL) to achieve payment system for over 1,000 merchants in and around the operations of the SLF, borrowers and guarantors in the form the university campus in order to support QR Code payments through of paperless and digital ID that connects databases between the U APP. This shall support the financial management, together government and private agencies for verification. It makes with the objective to build a cashless society within the university. management fast, secure and in line with the National e-Payment 5. Mass Transit policy. • Mangmoom Card: The Bank cooperated with Until presently, the SLF has granted loans to more than the Mass Rapid Transit Authority of Thailand (MRT) for issuing 5.6 million students with the loan limit of more than 600,000 million Mangmoom Card in September 2018. Presently, the card can Baht. In 2020, the SLF granted more than 37 billion Baht to more be used for the travel via MRT Purple and Blue lines and Airport than 650,000 students, whereas the Bank had taken part in Rail Link. The Bank plans for the card to connect all types supporting the SLF’s operation to achieve its goal. of transportation by expanding Common Ticketing System Service • Student Loan Fund service via Pao Tang Application: to other skytrain lines and underground train lines as well as other The Bank cooperated with the Student Loan Fund (SLF) to develop mass transit systems in the future. a new channel that can provide a complete range of services • M-PASS Card Registration via Application: The Bank, to student borrowers. The information regarding the loan in collaboration with the Department of Highways, developed i.e., loan remaining balance, accumulated interest, payment the M-PASS Mobile Application to allow new users to apply for due date, latest payment information and loan repayment the M-PASS card via the application, so that they get more are available to be checked via Pao Tang Application without convenience and reduce cash payment. Previously, the Bank fee charged. installed an automatic card top-up system on the application • Smart University: The Bank has cooperated with in order to provide more channels for existing users to top-up universities countrywide in the Smart University Project with the their card instantly only by generating QR Code and making intention to elevate the universities in becoming the smart and transactions via mobile banking of the Bank without fee charge. cashless universities. The Bank links educational information system Moreover, the user can check the toll price and their card with its e-payment system and provides one-stop financial balance anytime and anywhere. management service through Krungthai Digital Platform such as • Train Ticket Payment Service via EDC: The Bank smart card for students and university staff, EDC machine cooperated with the State Railway of Thailand to install 140 EDC installation at payment points within the universities, QR code machines at 56 ticketing stations nationwide, which support payment and development of university mobile application to payment by QR Code scanning via mobile banking and by Visa support Thailand 4.0 policy and move towards a cashless society. or Mastercard cards of all banks worldwide. Additionally, Moreover, the Bank extended its cooperation with many the Bank developed an online ticket channel that connected to universities in 2020: National Institute of Development the payment system via Krungthai Payment Gateway. Customers Administration (NIDA), Royal Police Cadet Academy, Khonkaen can select to pay via both debit cards and Visa, Mastercard, Technical College, etc. JCB, and UnionPay credit cards. • University Application (U APP): Krungthai Bank • Ubon Smart Bus: The Bank and Ubon Ruamjai City partnered with 5 leading universities in 5 regions, namely Development (URCD) Co., Ltd. signed a cooperation agreement Mae Jo University, Burapha University, King Mongkut’s Institute of in “Ubon Smart Bus Smart City Project” in order to develop a cashless Technology Ladkrabang, Walailak University and Khon Kaen fare payment system which connected to the online system of Ubon University, and launched the University Application (U APP) to be Smart Bus with passengers. To be precise, passengers can pay fares a platform that connects all digital transactions of the Bank by tapping a debit or credit card with a PayWave symbol on Krungthai with all activities in the university. In an attempt to become smart EDC machine or scanning the QR CODE to pay via Krungthai NEXT university, the Banks and each university will work together application or mobile banking platform of other banks. This project’s through Krungthai Digital Platform, as well as develop the university objective is to solve the problem of traffic congestion and raise application at can effectively connect information systems, awareness on the environmental issues in Ubon Ratchathani province support all dimensions of digital lifestyles for students, teachers by persuading people to use more public transport and reducing and staff so that they shall live their life with ease and flexibility. the use of private transports. The services from the University Application include Virtual ID to Annual Report 2020 047

Furthermore, the Bank has also established Infinitas by Krungthai sector gains slow recovery and the exports are still concentrated Co., Ltd. with the vision of Infinity as a Service. The company is regarded in some industries i.e., automobile and electronics. However, as a new digital financial product and development company to support supporting factors for economic growth in 2021 is expected the Bank’s strategic plan that simultaneously drives a parallel two banking to stem from a gradual increase in government investment and models, Carrier and Speedboat. In this new business approach as the launch of government stimulus measures to boost domestic Speedboat, Infinitas focuses on providing services regarding the innovative consumption to recuperate from such difficult situation. & digital platform development to fully move forward the Bank to open As a result, Krungthai Bank’s directions and plans in 2021 will emphasize banking, virtual digital banking services business, including other new on maintaining its business potential for sustainable growth amid business models. Infinitas also endeavors to support new business the uncertainty and challenges from various factors affecting opportunities for organizations and business units of both Krungthai Bank the banking business. The Bank shall remain its focus on loan and its subsidiaries, customers and business partners of the Bank. quality control and continuous care for customers in an attempt In addition, the company takes part in driving large platforms, such as to assist them and the Bank to overcome this crisis. Furthermore, Pao Tang Application, as a basic digital structure of the country. the Bank will highlight on stabilizing and building a solid foundation This will lead to the establishment of financial foundation so as to help all for future sustainable growth. groups of people get access to digital financial transactions and drive As for Krungthai Bank’s business strategy in 2021, the Bank the country’s economy stably and sustainably. still carries out 2 Banking Model - Carrier and Speedboat - From participating in many financial infrastructure simultaneously to enhance the Bank’s growth. projects, the Bank had an opportunity to expand its business, 1. Carrier: Focusing on increasing efficiency and reducing especially in terms of the increase in new customer base, bank operating costs of main business units to safeguard the Bank’s deposits as well as loans. Its achievement has been reflected existing business and customer base from the success of Krungthai NEXT application with more than 2. Speedboat: Focusing on operating business by agile 9 million users, over 13.9 million state welfare cardholders, more method with the principle of Fail Fast Learn Fast, relying on agility, than 80 thousand Pracharat Blue Flag Shops nationwide. speed while the data analysis shall be conducted on digital Apart from that, the Bank also has accomplished the following projects: platform/open banking system. This approach aims for research Rao Mai Ting Kan (No One Will Be Left Behind) campaign with and seeks for new types of business with the purpose to expand more than 15.3 million participants; “Khon La Khrueng” (Let’s Go business from the customers’ partners as well as providing Halves) scheme with over 9.5 million Pao Tang application users collaboration with government projects. and more than 1.1 million merchants who used Thung Ngern Besides the implementation of aforementioned strategic application; Student Loan Fund with over 5.6 million borrowers, plan, the Bank will also operate its business by place importance including more than 4.7 million Civil Servant Medical Benefit Scheme on the 5 Execution Pillars in response to the uncertainty and cardholders. Krungthai Bank, therefore, current serves customers challenges of various factors in 2021 as follows: and Thai people of more than 40 million users, reinforcing 1. Ensure that the existing core business of the Bank the Bank to be a leader in establishing the country’s infrastructure. (Carriers) continue to grow sustainably and effectively. Those projects/schemes help the Bank to assess the needs With an emphasis on managing non-performing debt of customers accurately, support the business expansion of along with the support for the Bank’s debtors, as well as the target customers of the Bank effectively, reduce operating costs finding opportunities to perform cross sell, the Bank and generate income for the Bank sustainably. The examples aims that its debtor shall encounter as little impact as of such business expansion of the Bank are the launch of Krungthai possible. sSME Smart Shop Loan which increased opportunities for 2. Create new business models under the parallel strategy - the Bank to expand its customer base to entrepreneurs whose loan Carrier and Speedboat limit is less than 200,000 Baht and the liquidity enhancement - Changing from services to sales approach: Since for entrepreneurs who participate in the Pracharat Blue Flag Shop the Bank has a large number of employees in some branches, scheme, Chim-Shop-Chai (Taste, Shop, Spend) campaign, then some services may be replaced by digital technology, government project shops, or entrepreneurs who use application for example, call center, securities valuation, etc. Consequently, such as Thung Ngern application or Pao Tung application. branch operating approach must change from just providing services to sales in order to serve more diverse customers. 2. The Bank Directions, Plans and Key In addition, the existing business may be extended to a new business. Projects in 2021 (Forward Looking) To be precise, the Bank may transform the call center service Thai economy in 2021 seems to be highly uncertain owing or debt collection service that the Bank already has expertise in to the unanticipated economic recovery from the COVID-19 to serve for other businesses that is in need. outbreak. Since Thai economy is highly depended on foreign - Establishment of “Infinitas by Krungthai” - a company countries, both in terms of tourism and exports, the pandemic to develop new digital financial products, namely Digital Lending, has continually left prolonged impacts. Explicitly, the tourism Health Platform, Tourist Platform, Capital Market Platform, etc., 048

with the objective to provide the best and impressive experience has been widely used since the Chim-Shop-Chai (Taste, Shop, to customers and the public. Spend), Rao Tiew Duay Kan (We Travel Together) campaign, 3. Decrease Paper Use (Paperless): The Bank will Khon La Khrueng” (Let’s Go Halves) scheme, Health Wallet, etc. progressively adopt RPA or Robotic Process Automation Through using Pao Tang application, the Bank intends to support and AI in its internal work processes so as to reduce all people to get access to financial services via digital system paper use in the future and reduce work processes. This easily and conveniently, along with corresponding to the Thailand enables the Bank’s internal work processes to be faster, 4.0 policy towards the future cashless society in Thailand. helps enhance its competitiveness, as well as increase In 2021, Krungthai Bank still accelerates the development of customers’ satisfaction. a parallel digital system, namely open system – Pao Tang 4. Expand business from Bank’s customers (X2G2X): The application and closed system – Krungthai NEXT mobile banking, Bank takes the government sector as center and then in order to enable the Bank’s systems to accommodate for connects to business partners and retail customers with the growth from the extensive use of the platforms. At present both digital supply chain. platforms can facilitate more than 40 million users, making them 5. Krungthai Sustainability: The Bank supports the the largest digital platforms in Thailand as of now. They are also implementation of various activities or projects to take care the most efficient and stable systems on cloud system, reinforcing of Thai people, economy, society and environment the Bank to build the Thailand Digital Platform by Thai people as well as encourages to attain strong communities. for Thai people in the near future To illustrate, those projects are Krungthai Loves Community In order to effectively execute the strategic plan, the Bank project, State Welfare Card Scheme, Pracharat Blue Flag has set forth the important projects in 2021 as follows: Shops Project, etc. Attributable to the sustainable 1. Government as a Platform: The Bank endeavors operations, they will escort the Bank to grow with society to support policies and measures of the government and economy sustainably. Furthermore, the Bank by developing innovations and basic technology has prepared its personnel to keep up with the corporate infrastructure to accommodate for services that are strategy. Without leaving any employee behind, in line with government agencies’ plans. This is not only the Bank provides up-skill and re-skill trainings to employees contributed to the well-being and sustainable so that they can adjust their working styles and finally improvement on the quality of life of people, but the go along with the Bank’s strategy. Bank can also enlarge its customer base and expand The Bank will continue to put an emphasis on 5 Ecosystems, its business respectively. which are the main target group of the Bank in 2021. Various 2. Digital Supply Chain Solution: Expanding business from projects to be executed by the Bank shall focus on inventing customers’ partners (X2G2X) that starts with the Bank’s innovations that connect with 5 Ecosystems. For example, firstly, main customer or the government, then the Bank shall Government, those schemes are namely, State Welfare Card connect it to the business sector as the customer’s partner Registration Program for the year 2021 according to the Ministry within the supply chain. Finally, they are linked with the of Finance, the extension period for Rao Tiew Duay Kan digital supply chain and being included into the Bank’s (We Travel Together) Project, “Khon La Khrueng” (Let’s Go Halves) ecosystem. At this point, the Bank can offer the full-fledged scheme phase 2, as well as new functions and services financial services that truly meet all requirements. development for wallet applications. Secondly, Payment, there Krungthai Bank expected that the implementation of are development of new functions and services of Krungthai the aforementioned strategic plans and schemes would assist NEXT Digital Lending Service. Thirdly, Healthcare, projects are the and support the government policies, especially the Thailand 4.0 increase of more alliances for Smart Hospital, the development strategy, aiming for a cashless society and reducing inequality of new functions and services on the Health Wallet. Fourthly, and gap from income distribution in the society. Moreover, this Education, it focuses on expanding cooperation with universities strategic execution would strengthen the Bank’s competitiveness and educational institutions to implement the Smart University in digital banking, support the Bank’s role as a pillar of the nation’s project. Lastly, Mass Transit, there is the development of economy as well as elevate public trust towards the Bank. a cashless fare payment system for various types of public transport Accordingly, the Bank’s operations also correspond with systems, etc. the statement of direction, visions and missions that value To executed business plans of the Bank in 2021, the Bank has all stakeholders - employees, customers, society and shareholders, allocated over 10 billion Baht in technology for developing in the continuous and sustainable growth of the Bank. the Bank’s internal work processes and improving services for customers. Apart from the continuous investment plans from 2020, 3. Major Changes and Key Developments however in 2021, the Bank shall support new business expansion The Bank was established on March 14, 1966 through a merger that aligns with the Speedboat business model. The Bank continues between the Monthon Bank Co,.Ltd and Kaseat Bank Co,Ltd, to stimulate its open platform – “Pao Tang” application, which with the Ministry of Finance as the major shareholder. The Bank is developed in cooperation with the government sector, and was the first state enterprise that floated shares in the Stock Annual Report 2020 049

Exchange of Thailand and started trading since August 2, 1989. 2535 (as amended). Therefore, the Bank can operate its business The Bank registered its transformation to public limited company as commercial bank and is continue to be a listed company in on March 24, 1994 under the name “Krung Thai Bank PCL”, the Stock Exchange of Thailand. In addition, the Ministry of abbreviated to KTB, with the registration no. Bor.Mor.Jor. 335 Finance has amended the government budget disbursement (which has been changed to 0107537000882). regulation, so that the change of the Bank’s state enterprise The Bank accepted the transfer of assets and liabilities of status according to the Office of Council of State’s opinion has Sayam Bank Limited in August 1987 and of the First Bangkok City no impact on the Bank’s service provided to the Government Bank Pcl. in November 1998 for further management. entities in disbursing government budget through and depositing In September 2002, the Extraordinary General Meeting of their depository with, the Bank. Thus, there is no impact on the Shareholders approved the reduction of its registered capital to Bank’s financial status and operations. decrease the accumulated loss through reduction of par value Nevertheless, the interpretation of the status of the Bank from formerly Baht 10 to Baht 5.15 per share. under each law can be different depending on the scope of In October 2003, owing to the Financial Institutions the definition of the term “state-owned enterprise” under each Development Fund (FIDF) had the policy to reduce its shareholding law, which is in accordance with its different purposes and scope in the Bank, the Bank then made a public offering of the 3,000 of enforcement of law, for example: million shares held by FIDF. The public offering drew attention - pursuant to the Public Debt Management Act B.E. 2548 from investors; therefore, an additional 450 million shares were (2005) (the “Public Debt Management Act”): on 21 January 2021, offered, totaling 3,450 million shares at Baht 8.50 per share. the Public Debt Management Office has opined that the Bank After the public offering, FIDF held 56.4% of the Bank’s total paid up is considered a state-owned enterprise under section 4(b) iii of shares at that time. the Public Debt Management Act, This is due to the fact that In October 2012, the Bank increased its capital fund by issuing the definitions provided for the term “state-owned enterprise” rights offerings of 2,796.31 million ordinary shares with par value under the Public Debt Management Act and the Budget at Baht 12.60 per share to the existing shareholders. After such Procedures Act are different. capital increasing, FIDF still retained its status as the major - pursuant to the Public Private Partnership Act B.E. 2562 shareholding of the Bank accounting for 55.05 percent of (2019) (the “PPP Act”): on 10 February 2021, the State Enterprise the Bank’s total shares as at December 31, 2012. Policy Office has informed about the interpretation of the Bank’s In November 2020, the Office of Council of State had opined state-owned enterprise status under section 4 of the PPP Act. that the Bank is not a state enterprise under the definition in sub- According to the State Enterprise Policy Office, the definition of sections (2) and (3)i of section 4 of the Budget Procedures Act B.E. “state-owned enterprise” under sub-section (2) iv of the PPP 2561 (2018) (the “Budget Procedures Act”). The Office of Council Act includes a company whose more than 50 percent of its of State also further given its opinion that “state enterprise” is defined shares are held by “Other State Agency.” Since FIDF is considered in various laws and the determination of whether an agency is an “Other State Agency” pursuant to the PPP Act and is holding a state enterprise or not depends on the relevant law.ii more than 50 percent of the Bank’s share capital, the Bank However, since more than 50 percent of the Bank’s share is therefore considered a state-owned enterprise under the PPP capital are held by the Financial Institutions Development Fund Act. Thus, referring to the State Enterprise Policy Office’s official (FIDF), the Bank is still considered as state commercial bank which document, any partnership project between the Bank and any more than 50 percent of its shares are held by a state agency. government agency will not be subject to the procedures under The Bank is subject to the Financial Institutions Businesses Act B.E. the PPP Act. 2550 (as amended) and the Securities and Exchange Act B.E. If there is any interpretation in terms of the Bank’s status as under other laws, the Bank will inform an update correspondingly. i “State enterprise” means: (1) a Government organization under the law on the establishment of Government organizations, a State undertaking established by law or a State-owned business entity; (2) a limited company or public limited company of which more than fifty percent of the capital is contributed by a Government agency or a State enterprise under (1); (3) a limited company or public limited company of which more than fifty percent of the capital is contributed by a Government agency and a State enterprise under (1) or (2) or by State enterprises under (1) and (2) or by a State enterprise under (2); ii Details of the Office of Council of State’s opinion can be found in its memorandum regarding status of the Financial Institutions Development Fund and Krung Thai Bank Public Company Limited No. 1397/2563. iii “State enterprise” means: (a) a government organization under the law on establishment of government organizations, a State undertaking established by law or a business entity owned by the Government; (b) a limited company or a public limited company, more than fifty per cent of whose capital is owned by State agencies or State enterprises under (a); iv “”State enterprise” means: (1) a governmental organization under the law on the establishment of governmental organizations or a State-owned undertaking under the law establishing such undertaking or a Government-owned business organization; (2) a company or juristic-person partnership of which more than fifty percent of the capital is also contributed by a Government agency or a local government organization or any other State agency; 050

4. Shareholding Structure in the Financial • KTB Advisory Co., Ltd. conducts business as the Business Group holding company (formerly provided financial advisory services). The Bank invested in the companies in the financial business • KTB Leasing Co., Ltd. provides services in the hire group, which support the Bank’s business by means of purchase and leasing for all types of movable assets, factoring Consolidated Supervision complying with the supervision of Bank business and leasing of consumer products. (The Bank is currently of Thailand. The objectives were to supervise companies in considering to provide new credit lending). the financial conglomerate to achieve stability and operate • KTC Nano Co., Ltd. offers a nano finance service businesses appropriately in addition to prevent any risks that may in order to use for career under the supervision. occur from the conglomerate’s business operation in accordance • KTC Pico (Bangkok) Co., Ltd. and 4 companies that with the guidelines of Bank of Thailand. With the purpose to KTC Pico (Bangkok) Co., Ltd. holds shares to conduct pico finance support the Bank’s core business and reinforce the business business at domicile or residence in the province under the cooperation, the Bank classified the companies in the financial supervision. (The Bank invests indirectly via KTC Pico (Bangkok) conglomerate into two groups, namely subsidiary group and Co., Ltd., which fully invests in KTC Pico (Chonburi) Co., Ltd., associate group. Details are as follows: KTC Pico (Pathum Thani) Co., Ltd., KTC Pico (Samut Prakan) Co., Ltd., 1. Subsidiary Group: Subsidiary Group refers to the group and KTC Pico (Samut Sakhon) Co., Ltd. of companies in the Bank’s financial conglomerate and the Bank • KTC Prepaid Co., Ltd. operates payment services holds share either directly or indirectly in each company of more business, namely e-Money service, money transfer services via than 50% of its paid-up capital. To mainly support the Bank’s electronic channels, acquiring services and bill payment service. business operation, the subsidiaries play important role as one 2. Associate Group: Associate Group refers to the group of the Bank’s own business units, focusing on providing services of companies in the Bank’s financial business group that support to the Bank or serving as a channel in providing full range financial the Bank’s business and the Bank holds shares either directly or services for the Bank. The business operations of the subsidiaries indirectly in each company up from 20% to 50% of its paid-up are in accordance with the policies and strategic plans of capital. The Bank jointly invests with associated alliances in order the Bank. The companies in this group consist of: to generate business cooperation and strategic benefits, • KTB General Services and Security Co., Ltd. renders especially in developing financial products that meet diverse general business services to the Bank and companies within its customer needs. The companies in this group consist of: financial business group in the areas of; transportation of assets, • Krungthai Panich Insurance Pcl. offers all types of security service, cleaning service, building and training center non-life insurance services. management, printing business management, debt collection • Krung Thai IBJ Leasing Co., Ltd. provides leasing, hire service, customer relationship management service, other purchase and factoring services of machinery, production services, and transportation of cash and documents for other equipment, office equipment, vehicles and other assets, financial institutions and government agencies as permitted by for business operations the Bank of Thailand. • Krungthai Card Pcl. (1) conducts credit card and • KTB Computer Services Co., Ltd renders computer credit card-related business, merchant acquiring business, system service management, space rental service for computer authorized payment dealer service and personal loan business. system installation, system development service as well as • Krungthai ZMICO Securities Co., Ltd. (formerly KT providing consulting services to other organizations in terms of ZMICO Securities Co., Ltd. Rebrands as “Krungthai ZMICO” from the information technology usage in the organization. January 17, 2020 onwards) is a joint venture between the Bank • KTB Law Co., Ltd. renders legal services mainly to and SEAMICO Group. The company is a brokerage firm the Bank, associated companies and other agencies authorized conducting securities trading business, securities underwriting, by the Bank of Thailand. financial advisory service and other businesses permitted by • Infinitas by Krungthai Co., Ltd. renders digital platform the Securities and Exchange Commission. service and services related to technology. • Krungthai-AXA Life Insurance Pcl. operates life • Krung Thai Asset Management Pcl. (KTAM) conducts insurance services. the securities business relating to funds management and other businesses with the license granting from the Securities and 3. Other Companies Group: Other Companies Group refers Exchange Commission. to companies in which the Bank invests but excludes the companies in the financial business group.

(1) The Bank’s financial statements included Krungthai Card Pcl. in the subsidiary group by considering the control over the company according to TFRS 10. Annual Report 2020 051

Shareholding Structure in the Financial Business Group as at December 31, 2020

Krungthai

Krungthai Bank Pcl. List of Co-Investor Krungthai Bank Pcl. 45% Paibul Capital Co., Ltd. 26% Subsidiary Companies Associate Companies BoonPermPoon(Thailand) Co., Ltd 14% Sub Lieutenant Sombat Paniccheewa 4% 100% Krungthai Panich 45% KTB Law Co., Ltd. Sri Brother Co., Ltd. 3% Insurance Pcl. Others 8%

Krungthai Bank Pcl. 49% 100% Krung Thai Krung Thai IBJ Leasing 49% Mizuho Leasing Group 49% Asset Management Pcl. Co., Ltd. Krungthai Panich Insurance Pcl. 2%

Krungthai Bank, Pcl. 50% 100% KTB General Services Krungthai ZMICO 50% and Security Co., Ltd. SEAMICO Securities Plc. 49% Co., Ltd. Free Float 1%

Krungthai Bank, Pcl 50% Krungthai-AXA Life 100% KTB Leasing Co., Ltd 50% Company profile page for National Insurance PCL. Mutual International Pty Ltd 45% Tri Rattana Chart Co,. Ltd. 5%

KTB Computer Services Krungthai Bank, Pcl 49% 100% Krungthai Card Pcl. 49.29% Co., Ltd. Free Float 51%

76% KTB Advisory Co., Ltd. 24% 100% 100% KTC Pico Infinitas by Krungthai (Chonburi) Co., Ltd. Co., Ltd. 100% KTC Pico (Pathum Thani) Co., Ltd. 24.95% 75.05% KTC Nano Co., Ltd. 100% KTC Pico (Samut Sakhon)Co., Ltd.

24.95% 75.05% KTC Pico KTC Prepaid Co., Ltd. 100% (Samut Prakan) Co., Ltd.

24.95% KTC Pico (Bangkok) 75.05% Co., Ltd. 052

Business Operation

1. Income Structure Main income structure of the Bank: Comparison between 2018-2020 Unit: Million Baht

2020 2019 2018 Financial Statement (consolidated) Amount % Amount % Amount % Interest on interbank and money market items 3,594 2.9 7,113 5.7 9,882 8.4 Investments and trading transactions 435 0.4 482 0.4 325 0.3 Investments in debt securities 4,251 3.5 4,943 3.9 3,807 3.3 Interest on loans 104,307 85.3 109,784 87.4 104,681 89.3 Hire purchase and financial lease income 184 0.1 428 0.3 936 0.8 Others 66 0.1 221 0.2 139 0.1 Total Interest income 112,837 92.3 122,971 97.9 119,770 102.2 Deposits 13,765 11.3 17,861 14.2 19,445 16.6 Interbank and money market items 1,860 1.5 2,532 2.0 2,707 2.3 Contributions to BOT and Deposit Protection Agency 5,687 4.6 9,978 7.9 9,705 8.3 Debt issued and borrowings 3,080 2.5 4,085 3.3 4,093 3.5 Others 102 0.1 199 0.2 131 0.1 Total Interest expenses 24,494 20.0 34,655 27.6 36,081 30.8 Interest income, net 88,343 72.3 88,316 70.3 83,689 71.4 Fees and service income 27,690 22.7 29,596 23.6 29,493 25.2 Fees and service expenses 7,162 5.9 6,359 5.1 5,831 5.0 Fees and service income, net 20,528 16.8 23,237 18.5 23,662 20.2 Profit (loss) on financial instruments measured at fair value through profit or loss 3,134 2.5 N/A N/A N/A N/A Gains on tradings and foreign exchange transactions, net - - 3,197 2.5 3,500 3.0 Gains on investments, net 951 0.8 4,372 3.5 435 0.4 Share of profit from investments for using equity method 2,060 1.7 1,425 1.1 1,130 0.9 Dividend income 376 0.3 496 0.4 453 0.4 Other operating income 6,856 5.6 4,615 3.7 4,352 3.7 Total Non-Interest Income 33,905 27.7 37,342 29.7 33,532 28.6 Total income, net 122,248 100.0 125,658 100.0 117,221 100.0 Annual Report 2020 053

2. Products and services • Medium Enterprises Loans for customers with a total credit line of over Baht 20 million but not more than Baht 2.1 Loan Products 500 million. The Bank provides loans that meet customer needs • Loans for retail customers: The Bank focused in terms of working capital and business expansion. The Bank’s on developing and improving loans to suit all needs of retail customers have diversified in various sectors: manufacturing, customer in different groups and offered promotions for each service, wholesale, retail and agriculture, including import and product. Key products are such as KrungThai Thanawat revolving export. The Bank also has loan products that have specific designs loan, Multi-Purpose Loan, Loan for local and international studies, for customers in some business such as construction business, Krungthai Home Easy Cash, Krungthai Smart Money Loan which apartment business and tourism business as well as loan for is a clean loan offered to salary employees and the self-employed, improving the efficiency in manufacturing such as Transformation “Krung Thai Loan Give 5” which is an unsecured personal loan Loan or upgrade machinery by using robots or automation. offered to the private organization’s employees whose payrolls The Bank has cooperated with the Revenue Department to launch are paid via Krungthai Bank account, housing loans and Home special products to help promoting SME entrepreneurs, who for Cash Loan. Furthermore, the Bank also offered other products registered to exercise their rights under the Act for the Exemption of in the form of Housing Product Package such as special promotions Fine and cooperated with the Stock Exchange of Thailand for customers who apply for PromptPay, credit cards, fire insurance, (SET) under the “Development and Support for SMEs and Startups the automatic account debiting for payments of utility and Scheme” to increase knowledge, business skills and support Krungthai NEXT application. The Bank organized special activities potential and growing customers in order to access to capital and attended expositions continuously such as House and Condo markets through the Live Platform (SME Platform) program, which Show, Money Expo and organized promotional activities in will lead to sustainable national economic development. cooperation with branches and regional offices nationwide, In addition, the Bank provided assistance to customers who have including offering special campaign to drive the economy under been affected by the economic situation and COVID-19 crisis, the government policies, such as measures to lessen the burden of both directly and indirectly, such as the import-export business, housing purchases under the “Baan Dee Mee Down” (Home travel related business and agricultural products processing Loan with Down Payment) scheme in order to lessen the burden business by approving a suspension of principal and term loans and encourage the general public to have their own home. up to 12 months, extending the repayment period for promissory In addition, the Bank also implemented measures to assist customers notes (P/N) and foreign trade finance (Trade Finance) up to 6 affected by the COVID-19 outbreak. Such measures are varying months, including soft loan support to enhance liquidity of according to different products to suit each customer, such as the business. a moratorium, suspension of principal payment and reduction • Corporate Loans are divided into two groups: in instalment amount to alleviate the troubles of the Bank’s 1) A group of corporate customers having total sale volume of more customers. than Baht 1,000 million and credit line of over Baht 500 million. • Small Business Loans for retail customers with The Bank provides loan services and delivers integrated financial total sale volume of not more than Baht 100 million per year and solutions by industry: agricultural business, construction and property the credit line in total of not more than Baht 20 million (sSME). development business, service business and industrial business; and In 2020, the Bank continued many projects since 2019, such as 2) A group of mega-corporate customers that requires complicated developing Krungthai sSME loan for Blue Flag Shops as “Krungthai financial services, Accordingly, the Bank provides total solution sSME Smart Shop” loan to suit the competitive environment and financial services that aims to meet our customers’ loan demand meet the needs of customers completely, Krungthai sSME loan and/or a variety of fundraising for this customer group. The Bank with single account, Krungthai sSME loan for tax payment to also focuses on prevention of various risks concerning the financial the Revenue Department, Krungthai sSME loan for EEC 4.0, Krungthai structure, marketing, foreign exchange, and fluctuations in prices of sSME loan for tourism business and related business and Krungthai goods and raw materials, which mega-corporate customers sSME Supply Chain Financing which extends loans offering from have to encounter continuously caused by the fast-pace and the Bank’s customers and partners. Moreover, the Bank provided unstable condition of economy, finance, and customers’ financial assistance to small business owners affected by behaviors. the COVID-19 outbreak by a six-month moratorium on principal and - Expand potential corporate customer’s base, interest, and continued to provide second phase of assistance including new target industry for innovations and government measures to sSME customers as appropriate and capable of investment projects to increase the growth of the Bank and be the customers. as part of engines of growth to boost the country’s economy and competitive strength. 054

- Value adding and integrated supply chain Finance and Government Savings Bank) and joined the TCG to services combined with digital platforms that link mega-corporate enable the SMEs with lack of collateral to access to the Bank’s customers and related business partners, which are more loans, such as Portfolio Guarantee Scheme (PGS phase 1-9), PGS convenient for the customers and reduce duplication of review Special Term Guarantee Scheme, Soft Loan Plus, etc. process of related party transactions. • Financial Institution Loans and Overseas - Increase customer base that have main Branches Loans. Financial institution loans are a part of the operating accounts with the Bank. interbank and money market. The Bank monitors and develops its - Support corporate customers to expand business to business operation with financial institutions; offshore financial foreign countries, especially Asia-Pacific countries and CLMV institutions, branches and subsidiaries of offshore financial institutions countries. conducting business in Thailand, including domestic financial In 2020, the Bank provided appropriate assistance for institutions, specialized financial institutions, securities business, asset each corporate customer affected by the COVID-19 outbreak, management companies, insurance and leasing business. such as a moratorium, indulgence for loan conditions, including For overseas branches loans and services, the Bank offers products to loan approvals as needed in order to sustain customers to operate customers through 8 overseas branches, namely Phnom Penh branch, their business continuously. Siem Reap Province sub-branch, Vientiane branch, Singapore • Government and State Enterprise Loans branch, Kunming branch, Mumbai branch, Los Angeles branch and provided for government agencies that are large customer base Cayman branch, by focusing on supporting the growth of Thai and have low risk. The loans are: 1) Loan directly granted to customers that expand their business potential on trading and the government agencies and state enterprise to support government investment in the region as well as expanding the Bank’s local policies and operations of government agencies and 2) Loan customer base abroad. Moreover, Krungthai has 1 Yangon coordinated with respective government agencies, for example representative office to facilitate investment and trade between Environment Loan (Ministry of Natural Resources and Environment), Thailand and Myanmar for customers, especially the ASEAN Payment Revolving Loan for Energy Conservation (Ministry of Energy), soft Gateway (APG) scheme in collaboration with partner banks in the loan for entrepreneurs who are directly and indirectly affected development of payment services for goods and services, including from the outbreak of COVID-19 (Soft Loan BOT: COVID-19 and labor and business transfers which raises the level of financial services Soft Loan GSB: COVID-19) phase 1-2, soft loan for Thailand tourism for the recipients in foreign countries to access to banking services. recovery, Transformation Loan program (Soft loan to modify During the COVID-19 outbreak situation, the Bank machines in cooperation with Ministry of Industry, Ministry of continuously improved the core banking system and work processes of overseas branches to be connected with the headquarters as well as responding to the supervision of changes in regulation and new financial services more quickly aiming for developing and promoting the strength of overseas networks as well as supporting the expansion of the business when the economic conditions return to normal smoothly and efficiently.

2.2 Other services • Cash Management: consists of 1. Cash Management: The Bank has offered convenience to full-fledged financial management services for both government and private sectors, covering repayment, collection, liquidity management and financial data management. 2. Corporate Credit Product: Supply Chain Financing, Factoring Loan, Letter of Guarantee and other credit products such as Former and electronic letter of guarantee service, discounting bills avaled by Krungthai Bank (Smart Aval), electronic discounting cheques for sugar cane deposit for customers in sugar manufacturing and agriculturists, e-Credit Confirmation, etc. Annual Report 2020 055

In 2020, there were key projects as follows: national strategic plan for payment systems, especially promoting o Online Real-Time Payment System Project: the use of ISO 20022 to improve services. Customers can pay money through all payment channels. o Online Tax System Project (e-Tax): A service o Government Welfare Payment Project provider for delivering e-Tax Invoice and e-Receipt as well as through Krungthai Corporate Online system of the Comptroller deducting and remitting withholding tax (e-Withholding Tax Plus) General’s Department. on behalf of entrepreneurs when transferring or paying money o Digital Court: E-filing System Project Project to the Revenue Department. to file and accept lawsuits via online system of the Court of o National Lottery Prize Claims at the Bank’s justice. branches. o Employment Promotion Program for Public o Withdrawal via EDC machines at Thai Post and Private Graduates (Government Co Payment); The Bank has Offices nationwide. supported the service of paying government subsidies to o Mass Transit Project: Payments of expressway employees under the employer who participated in the program. tolls, transportation fare and management of payment systems o Local Tax Collection Project in collaboration for the public transport via debit card, credit card with EMV with the Department of Local Administration and Bangkok standard and the government welfare card. Metropolitan Administration. o Bangchak In-car Payment in cooperation o Treasury E-Auction Project to dispose of with Bangchak Corporation Pcl. confiscated property of the Treasury Department by helping to o Digital Supply Chain Financing Project is to create an online auction system through the website channel. help merchants in accessing funding source more easily by o Projects under a strategic plan for payment extending from the government schemes such as Pracharat systems: The Bank has participated in many projects under the Shops, Chim Shop Chai (Taste-Shop-Spend), Khon La Khrueng (Let’s Go Halves), etc. 056

o International Financial Services Project: The Bank provided Host-to-Host (TradeLynk) service to provide real-time connection between companies and the Bank to transmit data. Additionally, the Bank also developed Foreign Currency Deposit (FCD) on Krungthai Corporate Online platform. • International Products and Services 1. International Funds Transfer Services are divided into 2 main categories as follows: 1.1 International Transfer consists of 1) Inward Remittance: The Bank provides fund transfer to an account of customer or beneficiary in Thailand. After receiving order from correspondent bank or the Bank’s overseas branch, the customer will get the money right away by Straight Through Process (STP) or the money is transferred to his/her account at the end of a working day. The Bank also provides Pre-advice for Inward Remittance and Credit Advice for Inward Remittance and the notification of money transfer will be sent to the customer’s email by Pre-advice service. 2) Outward Remittance: The Bank transfers funds overseas according to the customer’s order (transferor) via SWIFT to correspondent bank or direct payee bank. The Bank also offers a special exchange rate for transferred amounts exceeding USD 20,000 as well as providing international transfer service around the world. The Bank also offers delivery of Advice for Outward Remittance / Copy MT 103 to customers via E-mail. The Bank’s outward remittance is well accepted and trusted, reflecting through the Straight-Through Processing (STP) Award from the leading banks oversea - Wells Fargo, the Bank of New York and the Bank of America Merrill Lynch. The Bank has SWIFT gpi system so that customers can check the status of money transfer in real time. Retail customers can contact via Krungthai Contact Center Tel. +662 111-1111 and corporate customers via Krungthai Corporate Online. 1.2 Express Fund Transfer via Western Union System refers to the service of receiving and sending only a small amount of money for individual-to-individual transfer. The receiver does not need to have an account with the bank. This service is provided at any Krungthai branches and foreign exchange booths with foreign exchange booths with Western Union logo nationwide, including service channels: ATMs, Internet Banking and Krungthai NEXT application. The Bank also provided a service for e-Commerce such as Amazon.com through Western Union. 2. Foreign Currency Deposit Account Service consists of savings account, fixed deposit account and current account, which is available more than 10 currencies for the customers who want to use a foreign currency or want to save money in a foreign currency and use as a tool for foreign exchange risk management. Furthermore, the Bank launched a service for Annual Report 2020 057

international transfer from Foreign Currency Deposit (FCD) account through Krungthai Corporate Online platform and able to manage FCD account for liquidity management in line with the policy of the Bank of Thailand to relieve the use of a single foreign currency deposit account announced in 2020. 3. Foreign Currency Exchange Service is available at any Krungthai branches and exchange booths nationwide. Customers can pay for the purchase of foreign banknotes with KTC credit card with a maximum interest-free period for up to 45 days and check nearby branches on the Bank’s website. Moreover, the Bank provides a more secure and convenient foreign currency exchange service, Krungthai Travel Card. This card is available for up to 19 main currencies (including Thai Baht) exchange storing in the card. Customers can exchange money online 24/7 and manage the card via Krungthai NEXT application. They can also use the card to buy goods at shops in foreign Country worldwide and make cash withdrawal in foreign banknotes at available branches such as NanaNua Office, Siam Paragon Branch and Central Ladprao Branch. 4. International Trade Service for exporter and importer: The Bank provides financial services and loans for exportation, letter of guarantee, domestic trading service under the payment method of letter of credit, advice on traditions and practices defined by the International Chamber of Commerce (ICC) guaranteed technological system with international standard. This full-fledged service is provided to customers through Krungthai Corporate Online (Trade Online) to access customers the fastest and most effective. Besides, the Bank received ISO/IEC 27001:2013 certificate due to its information security management for the Trade Finance System (TFS) and Krungthai Corporate Online (Trade Online). Meanwhile, in 2020, the Bank also provided funding assistance to support customers affected by COVID-19 pandemic to get through the crisis. • Global Market Products and Investment Banking 1. Global Market Products for corporate businesses, SMEs, government agencies and state enterprises, and Ultra High Net Worth (UHNW). The Bank has client suitability and appropriateness analysis prior to offering financial derivatives complying with the regulations of the Bank of Thailand (BOT) and Securities and Exchange Commission (SEC) to ensure that the derivative transactions offered to customers match with customer needs. The Bank also encourages the customers to have knowledge about and understand banking transactions and related risks. Products and services consist of currency exchange in and forward markets, government and corporate bonds, investment products of the Bank and its partners for UHNW customers, financial derivatives for hedging the risk of currency exchange and short and long-term interest, for instance, currency option, interest rate swap (IRS), cross currency interest rate swap (CIRS) and commodity hedging. 058

2. Investment banking and debt instrument business product is the service for capital funding and making transactions related to Debt and Equity Capital Markets Business. The Bank is a mediator between the customers who need capital and investors. It provides arranging and underwriting service, financial advisor service and selling agent service. Although in 2020, the value of debt and equity instruments issuance in Thailand has significantly decreased from the previous year due to the COVID-19 outbreak, the Bank has been successful in arranging and underwriting debt securities to public and private issuers. Additionally, the Bank was an underwriter for investment units of infrastructure fund and ordinary shares. It also was an underwriter for Matrix Bond Switching of the Public Debt Management Office, Ministry of Finance, which succeeded well, issuance of bond worth Baht 100,000 million.

• Electronic Banking Service 2. New version of Krungthai NEXT: The Bank has 1. Electronic Machine: ATM, RCM and Update adopted world-class technologies such as AI (Artificial Passbook Machines are available 24 hours a day. Besides Intelligence), Cloud Native, API (Application Program Interface), withdrawal, deposit and money transfer, bank account balance Biometric Verification, etc. to develop new version of Krungthai check, KTB E-Money Card/ Easy Pass Card top Up, mobile payment NEXT application in order to become the full-scale digital banking service, purchasing government bonds, registering to use that support all financial activities in the future. Examples of Krungthai services: Krungthai Next, SMS Alert, automatic debit, important technologies and features of new Krungthai NEXT are checking of credit information, and mini statement. In addition, as follows: the Bank offers extra services: identity verification with national o Artificial Intelligence (AI) creates interactions identification card service (Dip-chip) for Pao Tang mobile with users through smart transaction that learns and lists the most application usage, cash withdrawal and balance inquiry service frequently used financial transactions; smart banner that will via contactless method (Tap a card to make a transaction), notify important items such as insurance premium payments due, cash withdrawal mode for blind and visually impaired persons card renewal, etc.; and smart promotion that offers special service (The gray machines of the Bank), cardless withdrawal promotions for each individual. service, currency conversion service for foreign cardholder to o Cloud Native Technology is 100% used by confirm exchange rate before withdrawal, pre-purchasing - Krungthai Bank, which is the first bank in Thailand. This consists booking lottery tickets service, PromptPay registration and traffic of 3S technology: Scalability - to support large amounts of ticket payment service through ATMs, Krungthai Next application simultaneous financial transactions, Stability - to support stability and Krunthai branches. However, the Bank’s ATMs can receive and smoothness of use, and Security - to provide the maximum cards displaying the logo of Plus, Cirrus, Union Pay, JCB, American security with world-class technology. Express, APN (Asian Payment Network) and other Non-Bank cards o Biometric Verification can be enabled with as well as providing services in many languages in conducting face authentication, i.e., verifying the identity of a person using transactions, for instance, Thai, English, Chinese, Japanese and their face and identification card. Myanmar. Annual Report 2020 059

o User Experience (UX) และ User Interface (UI) through Krungthai Panich Insurance Pcl. The Bank provides such meet all requirements and deliver a superior customer experience: products and services through omni-channels nationwide, Customers can set their profile picture and customize their the Bank’s network, its affiliates’ branches, online channels and homepage as they like, whereas the color themes will be telemarketing. automatically adjusted according to the time of the day or • Credit Cards and Personal Loans: Krungthai important festivals, etc. Card PCL. (KTC) has credit card, personal loan and merchants o Key features of the top-up and payment as its core businesses as well as expanding additional businesses services that have the most comprehensive financial transaction including pico finance business in 4 branches and car finance network in Thailand for both public and private sector business through the Bank’s network channel and its online organizations are offered such as electricity bill, water bill, mobile channel. Moreover, Krungthai Card Pcl. established KTC Prepaid Co., phone bill, internet bill and traffic ticket payment service, etc. for operating payment service business. • Funds: The Bank cooperated with Krung Thai Asset • Hire Purchase and Leasing Services: The Bank Management Pcl. (KTAM) to provide mutual funds, infrastructure provides equipment leasing, hire purchase and car rental services funds, property funds, provident funds and private funds through with maintenance to corporate customers and SME businesses the Bank’s channels for both through branches and Krungthai through Krung Thai IBJ Leasing Co., Ltd. NEXT mobile application. The Bank focused on trading a variety • Securities Brokerage Service: Krungthai ZMICO of mutual funds to be an alternative for investors, for example, Securities Co., Ltd. operates securities business. It offers securities domestic and foreign fixed income funds, stock funds, balanced brokerage, futures agent/dealer, borrowing and lending (principal funds (stock-bond), and foreign investment funds such as Feeder and agent), investment in securities and trading securities, selling Fund and Exchange Traded Fund (ETF). securities, financial advisory services, buying and selling foreign • Life and Non-Life Insurance: The Bank provides securities, issuing and trading derivative warrant and derivatives, life insurance products and services through Krungthai-AXA Life investment advisory services and mutual fund agency services, Insurance Pcl. and non-life insurance products and services including private fund management. 060

Market and Competition

3.1 Overview of Banking Business and Competition infrastructure efficiency, increasing the number of banking agents in 2020 as well as reducing the number of branches and service points by During 2020, the commercial banking business (commercial 338 branches and points after the volume of mobile banking banks) faced challenges from the recession due to the impact of payments in the first 10 months of 2020 increased 77 percent over the COVID-19 pandemic. Commercial banks had to expedite the same period of the previous year. Nevertheless, commercial customer assistance measures both the loan interest rate cut banks focused on offering products and services with innovation in line with the policy interest rate direction and the reduction of and modern technology with more entry into the ecosystem of the remittance rate to the Financial Institutions Development customers, and in the form of services other than traditional or Fund as well as assisting through the postponement and reduction beyond banking, such as online deposit account opening service of the debt repayment burden and debt restructuring which has and social banking service such as digital lending via social media a total value of Baht 4.55 trillion, calculated as 31 percent of platform among the challenges of preparing for compliance with total loans as of the second quarter of 2020, especially small and official regulations, namely the Personal Data Protection Act, B.E. medium business customers (SMEs) with the contribution up to 2562 (PDPA). The 2020 performance of commercial banks is 49 percent of SMEs loans. Correspondingly, commercial banks summarized as follows: also provided additional loans to enhance liquidity to the business • Loans to customers and net accrued interest sector, for example, through the Soft Loan scheme of the Bank of receivables grew 5.39 percent, accelerating from 1.80 percent growth Thailand (BOT) with a total amount of Baht 500 billion amid the last year, in line with government and corporate loans. relaxation of the debtor classification of the BOT, which slow • Deposits increased by 9.63 percent, compared down the acceleration of non-performing loans in the commercial to 4.15 percent of the expansion in 2019, especially due to savings banking system. deposits and current deposits (CASA). Transformation in accordance with the change after • Net Profit decreased by 46.44 percent, compared the COVID-19 crisis, especially the faster-than-expected digital with 30.71 percent in 2019 because commercial banks set aside economy, becomes another challenge that all commercial banks high level of expected credit loss repeatedly. Net interest income has to face. In 2020, the business model of commercial banks has increased by only 3.31 percent, but net fee and service income changed, particularly on digitalizing service channels, improving IT decreased by 10.00 percent. Annual Report 2020 061

• NPLs increased by 12.52 percent, rising at • Good relationship with government and state the faster rate than in 2019 that increased by 4.82 percent enterprise customers partly came from the continuous of good due to the impact of recession. Meanwhile, NPLs/ Loan ratio response of the Bank’s financial services to government agencies, increased to 3.11 percent from 2.98 percent in 2019. state enterprises and government personnel. In addition, the Bank • Total Capital increased by 5.24 percent, resulting also played an important role in supporting the implementation of in a strong Total Capital Ratio in strong level at 20.13 percent, government policies effectively, for example, nationwide electronic much higher than minimum criteria established by the BOT. payment infrastructures, driving Thailand to a cashless society, including measures to support the foundation economy and 3.2 The Outlook for Banking Business and rehabilitate the overall nation’s economy, such as the “Chim Shop Competition in 2021 Chai” (Taste-Shop-Spend) scheme, Rao Tiew Duay Kan (We Travel In 2021, commercial banks will still have to encounter Together) and Khon La Khrueng (Let’s Go Halves), etc. Besides, with economic risks regarding the uncertain recovery after the Bank has executed the blockchain technology to enhance a new outbreak of the COVID-19. The BOT established measures the efficiency of government schemes such as the Tourist TAX Refund in coordination with financial institutions to extend the period of Scheme, e-Government Procurement, DLT Scripless Bond. With the assistance to debtors, accelerate debt restructuring, relieve some customer base and business partner from the government sector, conditions and provide additional revolving fund and liquidity. This enable the bank to expand businesses and extend effective In addition, operations of commercial banks will continue to be operations, especially businesses in 5 Ecosystems; Government, in the low interest stage amid the intensified transition to Payment, Health and Wellness, Education, and Mass Transit. an digital economy which are challenging for the commercial • Strong capital fund to support growth: As of banks in modifying the business model, namely integration of December 31, 2020, the Bank had 19.11 percent of Capital physical and digital channels, employee upskilling & reskilling, Adequacy Ratio (The Bank’s financial business group). Tier 1 integration of technologies such as AI, blockchain, cloud computing, capital is 15.79 percent, which is higher than the minimum criteria data analytics and open API to meet changes in customer set by the Bank of Thailand, reflected the strength of the Bank’s behavior as well as increasing work efficiency, enhancing safety, capital status that will be able to support business expansion reducing costs and seeking new sources of income in the midst as well as to accommodate the risks that may arise from changes of competition from non-bank businesses such as payment service in the economy, society and regulations of the government. via digital wallet and personal loans. However, the endless • Strong Brand Recognition: Krungthai Bank is a large adaptation of Thai commercial banks with measures to remedy commercial bank that has served Thai customers for more than and recover the economy of the government, investment in 50 years. The Bank is one of the top banks that customers think technology and adaptation to a green economy under the new of and the Bank is recognized for being able to effectively use normal of business sector, are opportunities for commercial banks its trademark in their social marketing activities. for expanding loans and extending financial transactions. In the • Continuous improvement and development meantime, the emphasis on business operations on the basis of to the organization allows the Bank to quickly adapt to fast responsibility to all stakeholders or responsible banking with the changing business environmental factors, for example, internal concept of a sustainable banking under a strong financial status work process improvement; development of innovative products reflected through a much higher capital position and reserve and services which fulfill customer needs; having a clear digital than minimum criteria will support the banks to meet challenges banking development roadmap which covers the integration of from economic uncertainty and disruptions. innovations, including developing a stable and secure IT system to prepare for new transactions and their larger volume in 3.3 Competitive Potentiality of Krungthai Bank the future. Furthermore, the Bank has focused on developing Krungthai Bank is a large commercial bank with highly the agility and multi-tasking skills of the employees, together with competitive potentiality and is one of the leaders of Thailand’s encouraging them to have digital mind and digital literacy skill commercial banks. The key strengths that support the Bank’s in order to be ready for transformation to invisible banking. In competitive potentiality are as follows: this regard, the continuous development of the organization leads to an increase in new customers base, namely more than 9 million users of Krungthai NEXT mobile application and more than 10 million users of Krungthai Connext at the end of 2020. 062

Asset, Loan, Deposit and Branch

of Commercial Banking System as at December 31, 2020

Domestic Asset Loan (net) Deposit Branch

Amount Market Amount Market Amount Market Branch Market (Million Baht) Share (Million Baht) Share (Million Baht) Share Share (%) (%) (%) (%) 1. Bangkok Bank 3,384,961 15.55 1,896,205 14.06 2,485,597 16.16 1,128 17.43 2. Siam Commercial Bank 3,280,442 15.07 2,125,942 15.76 2,429,780 15.79 854 13.20 3. Krungthai Bank 3,226,987 14.83 2,127,089 15.77 2,466,780 16.04 1,024 15.82 4. Kasikornbank 3,061,407 14.07 2,066,638 15.32 2,340,470 15.21 866 13.38 5. Bank of Ayudhya 2,460,731 11.31 1,609,830 11.93 1,819,223 11.83 683 10.56 Total of Large Banks 15,414,528 70.83 9,825,704 72.84 11,541,850 75.03 4,555 70.39 1. TMB Bank 1,205,404 5.54 693,775 5.14 815,678 5.3 457 7.06 2. Thanachart Bank 811,183 3.73 649,686 4.82 557,957 3.63 444 6.86 3. UOB Bank 632,342 2.9 421,662 3.12 491,560 3.2 152 2.35 Total of Medium Banks 2,648,929 12.17 1,765,123 13.08 1,865,195 12.13 1,053 16.27 1. CIMB Thai Bank 404,421 1.86 217,576 1.61 194,150 1.26 59 0.91 2. Kiatnakin Phatra Bank 354,468 1.63 262,643 1.95 252,067 1.64 66 1.02 3. Tisco Bank 264,921 1.22 213,802 1.58 204,859 1.33 58 0.90 4. Land and Houses Bank 240,085 1.10 155,838 1.16 182,735 1.19 108 1.67 5. ICBC Bank (Thai) 225,413 1.04 111,933 0.83 147,053 0.95 21 0.33 6. Standard Chartered Bank (Thai) 167,167 0.77 28,800 0.21 84,329 0.55 1 0.02 7. Thai Credit Retail Bank 80,721 0.37 66,823 0.50 64,626 0.42 517 7.99 8. Sumitomo Mitsui Trust Bank (Thai) 78,454 0.36 51,280 0.38 21,719 0.14 1 0.02 9. Bank of China (Thai) 68,562 0.31 45,455 0.34 47,094 0.31 9 0.14 10. ANZ Bank (Thai) 49,406 0.23 18,960 0.14 10,052 0.06 1 0.02 11. Mega International Commercial Bank 25,120 0.11 20,766 0.15 16,417 0.11 5 0.08 Total of Small Banks 1,958,738 9.00 1,193,876 8.85 1,225,101 7.96 846 13.07 Total offshore branches 1,741,938 8.00 705,227 5.23 750,316 4.88 17 0.27 Grand Total 21,764,133 100.00 13,489,930 100.00 15,382,462 100.00 6,471 100.00 Source: Summary Statement of Assets and Liabilities (C.B. 1.1). BOT Notes: 1. The BOT grouping criteria for commercial banks are as follows: 1.1. Large Banks include Thai commercial banks with market share of 10% or above. 1.2. Medium Bank include Thai commercial Banks with market share of 2.5% and less than 10% 1.3. Small Bank include Thai commercial Banks with market share of less than 2.5% 2. Loan information (net) means loans to customers and net accrued interest receivables. 3. Domestic branch information include headquarters, service points and off-site banking services for more than 30 days. Annual Report 2020 063

4. Sources of Funds and Lending

Sources of Funds

Unit : Million Baht

Sources of Funds December 31, 2020 December 31, 2019 Change Consolidated Financial Statements Amount % Amount % % Deposits 2,463,225 74.0 2,155,865 71.6 14.3 Interbank and money market items, net 274,566 8.2 215,823 7.2 27.2 Debt issued and borrowings 86,564 2.6 96,841 3.2 (10.6) Other liabilities 148,361 4.5 195,361 6.5 (24.1) Total Equity 355,064 10.7 348,326 11.5 1.9 - Equity Holders of the Bank 343,466 10.3 338,287 11.2 1.5 - Non-Controlling Interest 11,598 0.4 10,039 0.3 15.5 Total 3,327,780 100.0 3,012,216 100.0 10.5

Key Sources and Uses of Funds Unit : Million Baht

Loans and deposits classified by maturity December 31, 2020 December 31, 2019 Change Consolidated Financial Statements Amount % Amount % % Loans - Not over 1 year 687,615 29.5 748,408 35.8 (8.1) - Over 1 year 1,647,227 70.5 1,341,465 64.2 22.8 Total Loans * 2,334,842 100.0 2,089,873 100.0 11.7 Deposits - Not over 1 year 2,444,240 99.2 2,016,641 93.5 21.2 - Over 1 year 18,985 0,8 139,224 6.5 (86.4) Total Deposits 2,463,225 100.0 2,155,865 100.0 14.3 * Excluding accrued interest receivables and interbank and money market items 064

Management Analysis and Discussion

Analysis of Operation and Financial Standing

1. Economic and Industrial Conditions Influencing • Deposits rose 14.3%, higher than 9.6% of the industry the Operation average, compared to a 4.2% increase in the previous year, Given the COVID-19 pandemic worldwide and in particularly from CASA. Thailand affecting operating environment and causing economic • Net profits fell 49.5%. The industry average decreased recession globally, IMF estimated the world economy in 2020 to 46.4% from a 30.7% increase in the previous year since commercial contract by 3.5% YoY, the deepest contraction since Great banks has continued to set aside expected credit losses at high Depression. Such global slowdown as well as disease control level. Net interest income decreased 0.3%, compared to a 3.3% measures significantly affected Thai economy, whose economic increase in the industry average. Net fees and service income system relies heavily on foreign sources of revenue, particularly decreased 11.8%, while the industry average contracted by 10.0% tourism and export sectors. Furthermore, epidemic control • NPLs increased 4.1%. The industry average rose 12.5% measures have restricted domestic economic activities, affecting accelerated from 4.8% in the previous year due to the effects domestic demand. As a result of this impact, Thai economy in of the economic recession. The NPLs to loan ratio was 3.79%, 2020 contracted by 6.1%, Hence, the government had urgently down from 4.33% in the previous year while the industry average issued the relief measures to help people and businesses affected was 3.11%, increasing from 2.98% in the previous year. by COVID-19 including public health-related plans, relief measures • Total capital funds fell 0.3% with Capital Adequacy for affected people as well as economic and social rehabilitation Ratio of 18.76%, while the industry average rose 5.24%, resulting through “Emergency Decree Authorizing the Ministry of Finance that Capital Adequacy Ratio remained strong at 20.13%, which is to Raise Loans to Solve Problems, to Remedy And Restore the still higher than the minimum capital requirement of the BOT. Economy And Society as Affected by the Coronavirus Disease Pandemic, B.E. 2563 (2020)”, with up to Baht 1 trillion of borrowing 3. Technology and innovation research and capacity. In addition, the Bank of Thailand (BOT) in collaboration development expense (R&D Expense) (which is with commercial banks had continuously issued measures to eligible for corporate income tax relief) provide assistance to customer such as debt restructuring, debt In 2020, the Bank has no expenditures for research and payment holiday, debt payment deferment, soft loan and liquidity development of technology and innovation that will be used for enhancement for corporate bond market. Moreover, Monetary corporate income tax benefits under the Royal Decree issued Policy has been extraordinarily relaxed, with the low policy rate under the Revenue Code Governing Exemption of Taxes of 0.5%. (No. 598), B.E. 2559 (2016). Beyond economic issues that have put pressure on performance and poses a challenge to risk management, 4. Analysis of Financial Standing and Operating changes in technology and consumer behavior, including the Result (Compared between 2020 and 2019) faster-than-expected transition towards the digital economy Overview of the Bank and Subsidiaries’ Operation in due to acceleration by the COVID-19 pandemic and social 2020 distancing measures to lead to a new normal may affect The Bank and its subsidiaries’ pre-provision profit in 2020 the Bank’s and customers’ business operations. Hence, the Bank was Baht 68,783 million, an increase of 8.9% YoY. Such increase has prepared and established various action plans to continually was mainly derived stable net interest income as 2019 level during respond to such challenges. this operating environment with series of policy rate and loan rate cuts while having higher special interest income (“special 2. Overview of Financial Standing and Operating interest income” interest income received from the auction of Performance Change in Comparison with Banking mortgaged guarantee assets) and precautious loan growth Industry (Analyzed from the Bank’s financial statements together with the cost of fund reduction, which had lessened in order to be comparable to the industry average, which the impact of such interest rate cuts. NIM resulted at 2.91%, BOT presented using the data from separated financial down from 3.22% YoY, mainly due to the impact from interest statements only) rate cuts. Furthermore, other operating expenses also declined • Loans to customers and accrued interest receivables 14.4%; whilst non-interest income declined. Cost to income ratio -net grew at 12.9%, higher than 5.4% of industry average resulted at 43.73%, down from 49.72% in 2019. accelerating from 1.8% growth in the previous year in accordance with the government and corporates’ credit utilization Annual Report 2020 065

The Bank and its subsidiaries had gradually set aside the expected credit losses at the high level of Baht 44,903 million, a 88.6% increase from impairment loss of loans in 2019 given through considerations on various factors in the continuously changing business environment under this economic slowdown with high uncertainties which could impact loan quality. This led to higher coverage ratio as at December 31, 2020 of 147.3%, increasing from 131.8% as at December 31, 2019. Given the management on the Bank’s asset quality, the NPLs Ratio-Gross decreased to 3.81% from 4.33% as at December 31, 2019. From the aforementioned performance with high level of expected credit losses, the Bank and its subsidiaries’ consolidated net profit attributable to equity holders of the Bank amounted Baht 16,732 million or a decline of 42.9% YoY. The Bank and the Financial Business Group’s Tier 1 and Capital Adequacy Ratios were 15.79% and 19.11% respectively, maintaining at a strong level as compared to BOT’s requirement. In addition, the Bank and its subsidiaries had incorporated Infinitas By Krungthai Co., Ltd. as a R&D hub for newly digitized financial products, becoming a service provider for various Innovation & Digital Platform, moving toward Open Banking, Virtual Digital Banking Service and new business model opportunities as well as strengthening mega platform such as Pao Tang Application as the country’s digital infrastructure. Furthermore, the Bank had entered into an agreement with Krungthai Card Plc. to sell 75.05% of KTB Leasing Co, Ltd., in which the closing is subjected to meeting the customary conditions including obtaining relevant regulatory approvals. Such partnership will strengthen the Bank and its subsidiaries in retail financial segment with full range of financial products.

Overview Operating Income and Net Profit Unit : Million Baht

Changes 2020 2019 (TFRS 9) % Net interest income 88,343 88,316 0.0 Net fees and service income 20,528 23,237 (11.7) Other non-interest income 13,377 14,105 (5.2) Total operating income 122,248 125,658 (2.7) Total other operating expenses 53,465 62,474 (14.4) Pre-provision profit(1) 68,783 63,184 8.9 Expected credit losses / impairment losses of loans and debt securities 44,903 23,814 88.6 Operating profit before income tax 23,880 39,370 (39.3) Income tax 4,441 7,232 (38.6) Net profit 19,439 32,138 (39.5) Net profit (attributable to equity holders of the Bank) 16,732 29,284 (42.9) ROA (%) (2) 0.53 1.02 ROE (%) (2) 4.91 9.09 (1) Pre-provision profit before provision (expected credit losses or impairment losses of loans and debt securities) and income tax. (2) ROA and ROE calculated from net income (attributable to equity holders of the bank) divided by average assets and average equity attributable to equity holders of the bank respectively.

• In 2020, The bank’s consolidated pre-provision profit was Baht 68,783 million, an increase of 8.9% YoY. This was mainly due to stable net interest income as 2019 level and sharp decrease of other operating expenses; whilst non-interest income declined. The Bank and its subsidiaries had set aside the allowance for expected credit losses amounted Baht 44,903 million, an increase of 88.6% YoY. Hence, consolidated net profit (attributable to equity holders of the Bank) was Baht 16,732 million, a decrease by 42.9% YoY. 066

Net Interest Income

Unit : Million Baht

Changes 2020 2019 (TFRS 9) % Interest income 112,837 122,971 (8.2) - Interbank and money market items 3,594 7,113 (49.5) - Investments and trading transactions 435 482 (9.8) - Investment in debt securities 4,251 4,943 (14.0) - Loans 104,307 109,784 (5.0) - Hire purchase and financial lease 184 428 (57.1) - Others 66 221 (70.3) Less Interest expenses 24,494 34,655 (29.3) - Deposits 13,765 17,861 (22.9) - Interbank and money market items 1,860 2,532 (26.5) - Contributions to BOT and DPA 5,687 9,978 (43.0) - Debts issued 3,080 4,085 (24.6) - Others 102 199 (48.5) Net interest income 88,343 88,316 0.0 Earning Asset Yield (%) (1) 3.72 (2) 4.48 (2) Cost of Fund (%) (1) 0.93 1.46 Net interest margin [based on earning assets] (%) (1) 2.91 (2) 3.22 (2) (1) Earning assets include financial assets measured at fair value through profit or loss; Interest bearing debts include financial liabilities measured at fair value through profit or loss from 1Q2020 onwards.. (2) If excluding interest income received from the auction, earning asset yield for 2019 and 2020 would be 4.34% and 3.56% respectively; hence, NIM for 2019 and 2020 would be 3.07% and 2.76% respectively.

• The Bank’s consolidated net interest income in 2020 Additionally, the Bank had special transactions on interest amounted Baht 88,343 million, a same level as 2019. During this income from loan in relation to partial payment from the auction operating environment with series of policy rate and loan rate of mortgaged guarantee assets of Baht 1,223 million in 3Q2020, cuts, KTB had higher special interest income (“special interest Baht 3,524 million in 2Q2020 and Baht 3,899 million in 1Q2019 income” interest income received from the auction of mortgaged (if excluding such special transactions, NIM stood at 2.76%, down guarantee assets) and precautious loan growth together with from 3.07% in 2019). the cost of fund reduction, which had lessened the impact of such interest rate cuts. Hence, NIM of 2.91%, down from 3.22% YoY, mainly due to the impact from interest rate cuts. Annual Report 2020 067

Change of interest rate

31 Dec 2020 30 Sep 2020 30 Jun 2020 31 Mar 2020 31 Dec 2019 30 Sep 2019 Policy Interest Rate 0.50% 0.50% 0.50% 0.75% 1.25% 1.50% Deposit Rate (1) - Savings Rate 0.25% 0.25% 0.25% 0.50% 0.50% 0.50% - 3 Months Fixed Rate 0.375% 0.375% 0.375% 0.60% - 0.70% 0.90% 0.90% - 6 Months Fixed Rate 0.50% 0.50% 0.50% 0.80% - 0.90% 1.15% - 1.35% 1.15% - 1.35% - 12 Months Fixed Rate 0.50% 0.50% 0.50% 0.90% - 1.00% 1.30% 1.30% Loan Rate - MLR 5.250% 5.250% 5.250% 5.775% 6.025% 6.275% - MOR 5.820% 5.820% 5.820% 6.620% 6.870% 6.870% - MRR 6.220% 6.220% 6.220% 6.745% 6.870% 6.870%

(1) Standard deposit rate for individuals Given the assessment on Thai economy’s higher contraction than previously forecasted from global economic depression trend and impact of global pandemic, the Monetary Policy Committee, Bank of Thailand had announced series of policy rate cuts, having the cut in November 2019, and 3 times cut in February, March and May of 2020 to 0.50%. Realizing its role as an important part to uphold the economy, to support government mechanisms and to help business operators and retail customers, the Bank had gradually been cutting lending rates of MLR, MOR and MRR in February, March, April and May of 2020, being the cuts on MLR of 1.025%, MOR of 1.05% and MRR of 0.65%. Furthermore, the Bank of Thailand announced the measure on lower contribution from financial institutions to the FIDF (FIDF fee) from 0.46% to 0.23% as announced on April 7, 2020.

Net Fees and Service Income Unit : Million Baht

Changes 2020 2019 (TFRS 9) % Fees and service income 27,690 29,596 (6.4) Less Fees and service expenses 7,162 6,359 12.6 Net fees and service income 20,528 23,237 (11.7)

• Krungthai Bank’s consolidated net fees and service income in 2020 was Baht 20,528 million, compressed by 11.7% YoY, mainly due to customers’ shift in service channel toward digital transactions during COVID-19 pandemic as well as lower transactions volume, whilst expansion on management fee and bancassurance fee. 068

Total Other Operating Income

Unit : Million Baht Changes 14,105 13,377 -5.2% Total Other Operating Income

Gain on financial instruments 3,197 N/A measured at fair value through profit or loss 3,134

Gain on trading and foreign 951 N/A exchange transactions

4,372 2,060 Gain on investments 376 -78.2%

1,425 Share of profit from investments 44.6% 496 accounted for under equity method 6,856 -24.1% Dividend income 4,615

2020 48.5% Other operating income 2019 (TFRS 9) • Krungthai Bank’s consolidated total other operating income in 2020 was Baht 13,377 million, a decrease by 5.2% YoY, mainly due to the decrease of gain on investments, despite the increases in other operating income on gain from sale of properties for sale and in share of profit from investments accounted for under equity method.

Total Other Operating Expenses

Unit : Million Baht Changes

62,474 -14.4% Total other operating expenses

53,465 -9.3% Employees’ expenses

-0.5% Premises and equipment expenses 31,390

28,466 -13.0% Taxes and duties

8,942 -78.7% Impairment losses of properties for sale

8,896 4,363 2.0% Other(1) 7,219 3,798 1,538 Cost to income ratio (%) 10,560 10,767 2020 2019 49.72(2) (TFRS 9) 43.73(2)

(1) Including Directors’ remuneration (2) If excluding interest income received from the auction, provision expense on employees’ benefits and impairment loss of properties for sale items, cost to income ratio for 2019 and 2020 would be 43.58% and 45.50% respectively. • Krungthai Bank’s consolidated total other operating expenses in 2020 was Baht 53,465 million, a decrease by 14.4% YoY due to special transactions on impairment losses of properties for sale and provision expense on employees’ benefits in 2019. This resulted in cost to income ratio of 43.73%, down from 49.72% in 2019 (if excluding special transactions, cost to income stood at 45.50%, an increase from 43.58% in 2019). Annual Report 2020 069

Expected credit losses / Impairment Loss of Loans Unit : Million Baht

Changes 2020 2019 (TFRS 9) % Expected credit losses (1)/ Impairment loss of loans (2) 44,903 23,814 88.6

(1) Expected credit losses for interbank and money market items, investments in debt securities, loans to customers (including loss from criteria change) and loan commitments & financial guarantee contracts (2) Impairment loss of loans and debt securities (for loans to customers) • In 2020, the Bank and its subsidiaries’ expected credit losses/ impairment Losses of loans amounted Baht 44,903 million, increasing 88.6% YoY given through considerations of various factors in the continuously changing business environment and in this economic situation of high uncertainties. The Bank’s consolidated coverage ratio increased to 147.3% from 131.8% as at December 31, 2019, though having an improvement in NPL ratio.

Financial Standing Analysis • Assets - Financial Assets and Investments, Net The Bank’s consolidated financial assets measured at fair value through profit or loss and net investments, per TFRS 9 were Baht 330,712 million as at December 31, 2020, in which financial assets measured at fair value through profit or loss comprised of government and SOE securities 47%, private enterprise debt securities 44%, marketable equity securities 6%, and unit trust 3%. Net Investments amounted Baht 395,228 million as at December 31, 2019.

Classifications of financial assets and net investments Unit : Million Baht

Consolidated Financial Statements 31 Dec 2020 (TFRS 9) Financial assets measured at fair value through profit or loss 13,724 Investment-net 316,988 - Investment in debt securities measured at amortized cost 1,740 - Investment in debt securities measured at fair value through other comprehensive income 300,505 - Investment in equity securities designated at fair value through other comprehensive income 14,743 Total financial assets and net investments 330,712

Unit : Million Baht

Consolidated Financial Statements 31 Dec 2019 Investment-net - Trading investments 48,252 - Available-for-sale investments 344,198 - Held-to-maturity investments 1,737 - General investments 1,041 Total net investments 395,228 070

Loan breakdown by type of business

2020 2019

31 Manufacturing and 22% 26% December Trading 2020 Real estate and 6% 5% construction

Public utilities and 25% 17% services

Housing loans 18% 19% 31 December 2019 Agriculture and mining 1% 1%

Others 28% 32%

- Loans to Customers The Bank’s consolidated loans to customers (less deferred revenue) was Baht 2,334,842 million, increased by 11.7% compared to the end of 2019, mainly from government and retail customers.

Loan to Customers

Unit : Million Baht

Changes Consolidated Financial Statements 31 Dec 2020 31 Dec 2019 (TFRS 9) % Loans to customers 2,335,241 2,090,342 11.7 Less Deferred revenue 399 469 (15.2) Plus Accrued interest receivables 16,199 5,160 214.0 Less Allowances for expected credit losses (1) 150,528 135,268 11.3 Loans to customers and accrued interest receivables-net 2,200,513 1,959,765 12.3

(1) Allowance for expected credit losses for loans to customers (including loss from criteria change) or allowance for doubtful accounts and allowance for debt restructuring revaluation per financial statements Annual Report 2020 071

Loan breakdown by type of borrowers (Consolidated’s Financial Statements) Unit : Million Baht 31 Dec 2020 31 Dec 2019 Changes (TFRS 9) Consolidated Financial Statements Amount % Amount % % Private Corporate 639,930 27.4 650,266 31.1 (1.6) Government and State Enterprise 367,293 15.7 182,986 8.8 100.7 SMEs (1) 335,857 14.4 332,447 15.9 1.0 Retail 991,804 42.5 924,268 44.2 7.3 - Housing 430,281 18.4 396,035 18.9 8.6 - Personal 496,443 21.3 464,138 22.2 7.0 - Credit card 59,990 2.6 56,653 2.7 5.9 - KTB Leasing 5,090 0.2 7,442 0.4 (31.6) Others 357 0.0 375 0.0 (4.7) Total loans (per F/S) 2,335,241 100.0 2,090,342 100.0 11.7 (1) SMEs were private companies that have employee no. less than/ equal to 200 people and fixed asset (excluding land) less than/ equal to Bath 200 million.

- Asset Quality

Unit : Million Baht

Consolidated Financial Statements 31 Dec 2020 31 Dec 2019 (TFRS 9) Gross NPLs (1) 107,138 102,659 Gross NPLs Ratio 3.81% 4.33% Allowance for expected credit losses (total) (2) 157,854 135,268 Coverage Ratio (3) 147.3% 131.8% (1) Gross NPLs based on principal less deferred revenue while including interbank and money market items (2) Allowance for expected credit loss (total) = Allowance for expected credit losses for interbank and money market items, loans to customers and loan commitments & financial guarantee contracts As at December 31, 2019, Allowance for expected credit loss (total) = Allowance for expected credit losses for loans to customers (including allowance for debt restructuring revaluation) (3) Coverage Ratio = Allowance for expected credit losses for interbank and money market items, loans to customers and loan commitments & financial guarantee contracts / Gross NPLs As at December 31, 2019, Coverage Ratio = Actual provisioning for loan loss / Gross NPLs 072

Unit : Million Baht 31 Dec 2020 (TFRS 9) Consolidated Financial Statements Loans and Accrued Allowance for expected (1) (2) Interest Receivables credit losses Loan Classification Performing 2,013,375 32,093 Under-performing 223,501 41,627 Non - performing 109,407 74,204 Lifetime ECL - simplified approach (3) 4,758 2,604 Total 2,351,041 150,528 (1) Loan less deferred revenue while including accrued interest receivables and undue interest receivables (2) Allowance for expected credit losses for loans to customers (including loss from criteria change) per financial statements (3) Lifetime ECL - simplified approach is the approach of the Bank’s subsidiary to recognize the allowance for expected credit losses on lifetime of finance lease receivables

Unit : Million Baht 31 Dec 2019 Net Amount Used in Consolidated Financial Statement Loan and Accrued Allowance for setting aside the Allowance Interest Receivables Doubtful Accounts for Doubtful Accounts 1. Loan Classification Normal 1,923,616 883,841 13,908 Special mentioned 68,696 30,545 8,478 Substandard 12,780 6,429 6,433 Doubtful 12,647 4,527 4,547 Doubtful of loss 77,294 37,398 37,403 Total 2,095,033 962,740 70,769 Excess allowance 64,459 2. Actual provisioning for loan loss (1) 135,268 (1) Allowance for doubtful accounts and allowance for debt restructuring revaluation per financial statement. Annual Report 2020 073

The Bank’s consolidated NPLs-Gross as at December 31, 2020 the Thai economy during January 1, 2020 to December 31, 2021 amounted Baht 107,138 million, having NPLs Ratio-Gross in accordance with the assistance measures for classification continuously improved to 3.81% from 4.33% as at December 31, in case of debt restructuring set by the Bank of Thailand. Such 2019. Given thorough considerations on various factors in the measure may retard an increase in non-performing loan. Current continuously changing business environment and in this economic asset quality may also not reflect the current economic conditions situation of high uncertainties that could impact loan quality, (Details of the BOT’s guidelines on providing assistance to the allowance for expected credit losses was set aside to remain borrowers affected by situations that affect the Thai economy at high level. Consequently, the Bank’s consolidated coverage are specified in Form 56-1 Year 2020, Part 1, Clause 2.5.3, Policy ratio as at December 31, 2020 increased to 147.3% from 131.8% of Supervision, Credit Approval and Credit Monitoring and in Risk as at December 31, 2019. Factors, sub-clause, risk of non-performing asset and loan on The Bank has temporarily provided measures to assist page 123). borrowers who have been impacted by the situations affecting • Liabilities - Deposits The Bank’s consolidated deposits was Baht 2,463,225 million, increased by 14.3% from December 31, 2019 with increases in saving and current deposits. Hence, the portion of current deposit and savings deposit to total deposit (CASA) accounted at 78%. The Bank’s consolidated loans to customers (less deferred revenue)-to-deposits ratio (L/D ratio) of 94.79% decreased from 96.94% as at December 31, 2019.

Deposits breakdown by types

31 December 2020 2019 2020

Savings deposit 74% 69%

Fixed deposit 22% 27%

31 Current deposit 4% 4% December 2019 074

Sources and Uses of Funds

Unit : Million Baht 31 Dec 2020 31 Dec 2019 Change (TFRS 9) Amount % Amount % % Net Interbank and money market items (asset) 516,792 15.5 338,771 11.2 52.5 Financial assets measured at fair value through profit or loss 13,724 0.4 N/A N/A N/A Net investments and net investments in associates 346,388 10.4 426,174 14.2 (18.7) Loans to customers (less deferred revenue) 2,334,842 70.2 2,089,873 69.4 11.7 Less Allowance for expected credit losses (1) 150,528 4.5 135,268 4.5 11.3 Other assets 266,562 8.0 292,666 9.7 (8.9) Total Assets 3,327,780 100.0 3,012,216 100.0 10.5 Deposits 2,463,225 74.0 2,155,865 71.6 14.3 Net Interbank and money market items (liabilities) 274,566 8.2 215,823 7.2 27.2 Debt issued and borrowings 86,564 2.6 96,841 3.2 (10.6) Other liabilities 148,361 4.5 195,361 6.5 (24.1) Total equity 355,064 10.7 348,326 11.5 1.9 - Equity holders of the Bank 343,466 10.3 338,287 11.2 1.5 - Non-controlling interest 11,598 0.4 10,039 0.3 15.5 Total liabilities and equity 3,327,780 100.0 3,012,216 100.0 10.5 Loans to customers (less deferred revenue)-to-deposits 94.79 96.94 ratio (%) (1) Allowance for expected credit losses for loans to customers (including loss from criteria change) or allowance for doubtful accounts and allowance for debt restructuring revaluation per financial statements

As at December 31, 2020, the Bank’s consolidated major source of funds was 74.0% deposits; and the other source of funds as equity, interbank borrowings, and debt issued and borrowings, in which the latter decreased from the end of 2019 due to the redemption on the Ringgit-Malaysia-denominated Subordinated Notes in an amount of MYR 1,000,000,000. The Bank’s consolidated use of funds comprised of 70.2% loans to customers (less deferred revenue), 15.5% net interbank and money market items, and 10.4% net investments and net investments in associates. • Equity - The total equity (equity holders of the Bank) as at December 31, 2020 was Baht 343,466 million, an increase by 1.5% as compared to December 31, 2019 - Book value per share (equity holders of the Bank) was Baht 24.57 per share increased from Baht 24.20 per share at December 31, 2019 Annual Report 2020 075

Statutory Capital Funds

Statutory Capital Funds (Financial Business Group) Unit : Million Baht (3) 31 Dec 2020 (3) 31 Dec 2019 (TFRS 9) The minimum The minimum rate required rate required (1) Financial Business Group Capital by the BOT Capital by the BOT Adequacy for 2020 Adequacy for 2019 Amount Amount Ratio (%) (2) Ratio (%) (2) (%) (%)

Common Equity Tier 1 capital 314,467 15.73 >8.000 304,705 15.19 >7.500 Tier 1 capital 315,755 15.79 >9.500 305,805 15.24 >9.000 Tier 2 capital 66,349 75,534 Total capital funds 382,104 19.11 >12.000 381,339 19.01 >11.500 Risk-weighted assets 1,999,516 2,006,423 (1) Balance sheet as under regulatory scope of the financial business group means financial statement for consolidated basis under BOT’s regulation which does not include non-life and life insurance companies, and companies held less than 50 percent of paid-up shares capital by the Bank. (2) According to BOT’s regulation, the minimum capital ratios of Commercial Banks in Thailand will be increased to absorb Capital conservation buffer more than 0.625% a year starting from January 1, 2016 until the capital buffer ratio of more than 2.5% is reached on January 1, 2019. Moreover, Krungthai Bank was named as the one of the Domestic Systemically Important Banks (D-SIBs) requiring to hold all capital ratios to absorb higher loss absorbency of additional 0.5% of risk-weight assets from January 1, 2019 and 1% of risk-weight assets from January 1, 2020 onwards (reference to the BOT Notification Sor.Nor.Sor. 16/2560 and 17/2560) (3) Capital funds and Capital Adequacy Ratio are preliminary information prepared accordance with BOT guidelines.

As at December 31, 2020, the Financial Business Group’s Common Equity Tier 1 was Baht 314,467 million (15.73% of its RWA) and Tier 1 capital was Baht 315,755 million (15.79% of its RWA). Total capital was Baht 382,104 million (19.11% of its RWA). 076

Statutory Capital Funds (The Bank’s Financial Statements) Unit : Million Baht (2) 31 Dec 2020 (2) 31 Dec 2019 (TFRS 9) The minimum The minimum rate required rate required The bank’s Financial (1) Capital by the BOT Capital by the BOT Statement Adequacy for 2020 Adequacy for 2019 Amount Amount Ratio (%) (1) Ratio (%) (1) (%) (%)

Common Equity Tier 1 capital 293,683 15.35 >8.000 285,462 14.80 >7.500 Tier 1 capital 293,683 15.35 >9.500 285,462 14.80 >9.000 Tier 2 capital 65,332 74,616 Total capital funds 359,015 18.76 >12.000 360,078 18.66 >11.500 Risk-weighted assets 1,913,769 1,929,176 (1) According to BOT’s regulation, the minimum capital ratios of Commercial Banks in Thailand will be increased to absorb capital conservation buffer more than 0.625% a year starting from January 1, 2016 until the capital buffer ratio of more than 2.50% is reached on January 1, 2019. Moreover, Krungthai bank was named as the one of the Domestic Systemically Important Banks (D-SIBs) requiring to hold all capital ratios to absorb higher loss absorbency of additional 0.5% of risk-weight assets from January 1, 2019 and 1% of risk-weight assets from January 1, 2020 onwards (reference to the BOT Notification Sor.Nor.Sor. 16/2560 and 17/2560) (2) Capital fund and capital adequacy ratio are preliminary information prepared accordance with BOT guidelines.

As at December 31, 2020, the Bank’s Common Equity Tier 1 and Tier 1 capital (bank only) were Baht 293,683 million (15.35% of its RWA). Total capital was Baht 359,015 million (18.76% of its RWA). On July 6, 2020, the Bank redeemed the Ringgit-Malaysia-denominated Subordinated Notes in an amount of MYR 1,000,000,000, exercising a call option in whole amount. Such notes was considered as part of Tier 2 capital. The Bank possesses healthy capital ratios compared to BOT’s requirement. Moreover, the Bank regularly reassesses the capital level to be in accordance with the BOT’s requirement.

Cash Flow Analysis At the end of December 2020, the Bank and its subsidiaries’ 2) Net cash flows from investing activities amounted to cash and cash equivalents was Baht 68,161 million, a decrease Baht 19,966 million, resulting from cash inflow from sales of of Baht 273 million or 0.40% from the end of December 2019. The investment in debt and equity Securities measured at fair value main reasons as follows: through other comprehensive income of Baht 211,772 million and 1) Net cash flows from operating activities amounted to purchase of investments in debt and equity Securities measured Baht 4,231 million, resulting from profit from operations before at fair value through other comprehensive income of Baht 185,121 changes in operating assets and liabilities of Baht 43,946 million: million. The main change in operating assets are an increase of Baht 3) Net cash flows from financing activities amounted to 179,596 million in interbank and money market items (asset) and Baht 24,513 million, resulting from cash outflows from repayments Baht 268,494 million in loans and the main change in operating of debt issued and long-term borrowings of Baht 14,540 million, liabilities are an increase of Baht 307,360 million in deposits and dividend paid for ordinary share of Baht 10,524 million and Baht 58,642 million in interbank and money market items (liabilities). repayments of lease liabilities of Baht 2,264 million. Note: Percentage change is calculated in accordance with the Bank’s financial statements. Annual Report 2020 077

Appendix I) The Effective of Thai Financial Reporting Standard and its Impact On January 1, 2020, TFRS 9 re: Financial Instruments had become effective. Upon the adoption, the Bank had key changes as follows:

Changes under TFRS 9 Previous TFRS

1. Financial Assets Classification into 3 categories according Classification of held-to-maturity debt securities, trading to the business model for managing the financial assets and the securities, available-for-sale securities and general contractual cash flows characteristics of financial assets as follows: investments 1.1 Amortized cost: with objective to receive contractual cash flows, having the receipts of principal and interest based on the principal amount outstanding at a specific date; such as loan to customers, interbank and money market items and mainly on previously classified as investment on held-to-maturity debt instruments Recognition will be initially measured at fair value on the trade date and will be subsequently measured at amortized cost net of allowance for expected credit losses (if any). 1.2 Fair value through other comprehensive income (FVOCI): with objectives to receive contractual cash flows and to sell financial assets, having the receipts on principal and interest based on the principal amount outstanding at a specific date; mainly consisted of previously classified as investment on debt instruments as well as of equity instruments Recognition will be initially and subsequently measured at fair value; unrealized gain or loss from changes in fair value will be reported as a component of shareholders’ equity through other comprehensive income until disposal. 1.3 Fair value through profit or loss (FVTPL): no objective to receive contractual cash flows; having the cash flows not generating from the receipts on principal and interest based on the principal amount outstanding at a specific date. Recognition will be initially and subsequently measured at fair value; unrealized gain or loss from changes in fair value and gain or loss on disposal of instruments will be recognized as gain (loss) on financial instruments measured at fair value through profit or loss.

2. Revenue Recognition (financial assets) Recognition of interest income and interest expense under Recognition of interest income by using the Effective Interest contract rate method and recognition of relevant fees in Rate (EIR) method, by taking into account any discount or premium whole amount at initiation on acquisition, fees and costs that are an integral part of the effective interest rate. 078

Changes under TFRS 9 Previous TFRS

3. Allowance for Expected Credit Losses on Financial Assets 3.1 Estimated allowance for doubtful accounts based on 3.1 Consider expected credit losses throughout the lifetime analysis of customers’ historical and expected future of financial instruments, taking into account the forward-looking on payment in accordance with BOT’s relevant regulations economic factors 3.2 Recognize expected credit losses of financial asset - debt instruments, which are measured at amortised cost or fair value through other comprehensive income, for: - Interbank and money market (assets) - Loans to customers - Investments in debt securities - Loan commitments and financial guarantee contracts 3.3 Three stage approach : Consider changes of loan quality since initiation as follows: 3.3.1 Stage 1 (Performing) 12 months ECL : No significant increase in credit risk (interest income calculated from gross carrying amount without any ECL deduction) 3.3.2 Stage 2 (Under - performing) Lifetime ECL : having significant increase in credit risk with no credit impairment (interest income calculated similarly as Stage 1) 3.3.3 Stage 3 (Non - performing) Lifetime ECL with Credit Impairment : having credit impairment (interest income calculated from net carrying amount)

4. Derivatives and Hedge Accounting consisting of: Having derivatives on foreign currency and interest in 4.1 Fair value hedges banking book, in which interest recognized on accrual 4.2 Cash flow hedges basis while foreign currency recognized the translation rate at the reporting date. Annual Report 2020 079

The adoption of new Thai Financial Reporting Standards II) The bank’s Relief Measures in Response to related to financial instruments and TFRS 16 Leases had no the Impacts of the COVID-19 Pandemic significant impact to the consolidated financial statements. The The bank’s Relief Measures consolidated cumulative change from such accounting standards Realizing the importance to uphold the economy, the Bank adoptions had been adjusted under retained earnings as at had issued relief measures to help customers (updated April 27, January 1, 2020, in which TFRS 16 had not impact on retained 2020) as follows: earnings. - Retail loan on both personal loan under supervision Upon the above changes, there would be no restatement (such as Smart Money loan, Multi-purpose loan 5 Plus) and housing of historical financial statements for comparison, in which the loan (such as Home Easy Cash loan) (not exceeding Baht 3 million): financial analysis might be affected as follows: 4-month debt payment holiday on principal and interest 1. Recognition of interest income by taking into account any together with 4-month lower interest rate of 0.25% per annum discount or premium on acquisition, relevant fee and costs of on existing loan agreement. financial assets will be under Effective Interest Rate (EIR) approach In addition, personal and housing loans with document proof and interest income will be amortized throughout the lifetime of of reduced income shall have 6-month debt payment holiday each financial assets. Previously, recognition of interest income on principal (payment on interest only) together with 6-month will be under contract rate approach and recognition of relevant lower interest rate of 0.25% per annum on existing loan agreement. fee will be in whole amount at initiation. These would mainly affect - Business loan (not exceeding Baht 100 million): 6-month ratios such as earning asset yield, NIM as well as fee income. debt payment holiday on principal and interest automatically Recognition of interest income from investment in debt - Business loan of medium-size or higher with document instruments will be under straight-line approach throughout the proof of reduced income: up to 12-month debt payment holiday investment period, which will be varied insignificantly from effective on principal for term loan together with up to 6-month debt interest rate approach. payment extension for P/N and trade finance 2. Value measurement on financial instruments will be - Supporting soft loans for liquidity on business loan (not shown under gain (loss) on financial instrument measured at fair exceed Baht 500 million): up to 20% credit limit of outstanding value through profit or loss, which consisted of gain (loss) from loan as at December 31, 2019 for up to 5-year tenure with first disposal, fair value measurement or reclassification of financial 2-year interest rate of 2.0% per annum, together with up to assets including trading and translating assets and liabilities in 12-month debt payment holiday on principal and first 6-month foreign currencies; and of net gain (loss) from changes in fair of no interest payment; participating in SFIs’ supporting soft loans value or adjustments on financial assets measured at fair value based on the stated criteria. through profit or loss; whereas, previously showed as part of gain - Continual lending rate cuts on MLR, MOR and MRR since (loss) on investments, net under other operating income. end of last year till 2Q2020 (latest lending rate cut effective on 3. Expected credit losses of financial assets will considerably May 22, 2020) on a cumulative of -0.65% to -1.05% be classified into 3 stages from previously 5 classifications of These measures will ease loan burden and increase liquidity allowance for doubtful accounts under BOT’s regulation. at present while the Bank will closely work with customers to Additionally, the new expected credit losses of financial assets consider the financial structure for their businesses in conjunction will extend to include items such as loan commitments & financial with the pre-emptive financial restructuring in order to provide guarantees and etc. from previously on loans to customers. Any additional assistance. bad debt recovery will be recognized as income. 080

BOT’s Relief Measures Phase 2 BOT had announced relief measure phase 2 for retail customers impacted from COVID-19 on the following: 1. Reduction on interest rate ceilings, service fee, and penalty (interest) for credit cards and personal loan under supervision (effective August 1, 2020 onwards) on the following details:

Previous ceiling New ceiling Type (% per annum) (% per annum) 1. Credit card 18 16 2. Personal loan under supervision - Revolving credit 28 25 - Installment payment 28 25 - Auto title loan 28 24 2. Credit limit extension on credit card and personal loan under supervision (effective August 1, 2020 onwards) For customers who are in need of additional credit limit and continuously pay on time with average income less than Baht 30,000 per month, temporary extending credit limit from 1.5 times to 2 times of average monthly income till December 31, 2021. 3. Additional relief measures phase 2 for retail customers (effective July 1, 2020 onwards)) The scope and period of such relief measures for retail customers impacted from COVID-19 and not considered as NPLs as at March 1, 2020 are detailed below given options of minimum assistance by type of credit available to the impacted customers.

Type Minimum Relief Measures 1. Credit cards Convert into loan of 48 installment or extend payment period according to debtor’s payment ability with interest rate ≤ 12% per annum 2. Personal loan under supervision: revolving loan 1. Reduce minimum installment payment according to payment ability or such as cash loan card 2. Convert into loan of 48 installment or extend payment period according to debtor’s payment ability with interest rate ≤ 22% per annum 3. Personal loan: installment payments and Reduce installment: at least 30% of previous installment with interest Auto title loan rate ≤ 22% 4. Hire purchase 1. Debt payment holiday (principal and interest): 3-month or 2. Reduce installment by extending payment period 5. Housing loan or Home for Cash 1. Debt payment holiday (principal and interest): 3-month or 2. Debt payment holiday (principal): 3-month and reconsider interest rate as appropriate or 3. Reduce installment by extending payment period Customer who would like to request for assistance could contact the Bank through various channels such as application, website, call center or SMS channel. Annual Report 2020 081

BOT’s Guideline on Assistance for SME Post Relief Program under the Royal Decree Given the Emergency Decree on Financial Assistance to SME affected by Coronavirus Pandemic B.E. 2563 (2020) with measure on loan payment holiday ending October 22, 2020, BOT had additionally announced on October 16, 2020 the guideline on continual assistance for debtors, taking into consideration on previous assistance by financial institution to SME during this uncertain situation of the pandemic. Guideline included: 1. To consider debt restructuring for SME based on their repayment capability. In the case of financial institution undergoes debtor’s evaluation process on debt restructuring, it is allowed for financial institution to maintain debtor’s asset classification till December 31, 2020 as prior to pre-relief measure. 2. In the case of financial institution was unable to clearly evaluate the debtor’s cash flow, it is allowed for financial institution to provide assistance in the form of payment holiday on principal and/ or interest based on each debtor’s repayment capability for up to 6 month from end-2020. The period of standstill on debtor’s asset classification and of payment holiday shall not be considered as part of the contract’s default terms and conditions. Additionally, BOT had extended the soft loan application period of financial institution to BOT for another 6 months in conjunction with extending the qualification of eligible soft loan borrower to include company in MAI.

BOT’s Additional Measures Given the ongoing COVID-19 pandemic situation far from recovery with high uncertainty, BOT had requested commercial banks on no interim dividend payment based on 2020 performance and no share repurchase, effective on June 18, 2020. In addition, commercial banks shall have capital management plan for the next 1-3 years in order to maintain strong capital level and to continuously support business operation. Additionally, BOT had launched DR BIZ program as the mechanism for multi-creditors businesses to manage debt restructuring according to the debtor’s capability under a one-stop service. Furthermore, debt consolidation practice helped debtors with repayment potentials by consolidating loans on housing and other retail loans, such as credit card, personal loan under supervision and hire purchase, utilizing the remaining value of collateral under housing loans. On October 29, 2020, BOT had announced guidelines regarding the interest calculation on amount overdue, the sequence of debt repayment in reducing NPL as well as debt burden, and the support on debt restructuring negotiation per 3 important topics as follows:

Guideline Financial Service Provider Effective Date 1. Interest calculation on amount overdue • Financial institution and the Financial Business April 1, 2021 based on only the overdue principal excluding Group the principal of future installments not yet due • SFI • Non-bank entity operating personal loan business under supervision 2. Interest rate on amount overdue based on • Non-bank entities operating retail loan business July 1, 2021 contractual interest plus no more than 3% under supervision per annum • Asset management company 3. The sequence of debt repayment by All financial service provider July 1, 2021 first repaying the fee, interest and principal of longest overdue 082

Additionally, the waive or leniency of overdue interest could the BOT had requested financial institutions, SFIs and non-financial be considered for the overdue prior to April 1, 2021. institutions operators (non-bank companies) to quickly and On December 22, 2020, the BOT had updated the guideline continually provide financial assistance to debtors who effected on SME affected by COVID-19 (soft loan) for flexibility. This included from such situation per additional relief guidelines as follows: the adjusted definition of “Business Group” to separately consider 1. To extend the filing period for retail debts’ relief request the relationship of individual from corporate entity, in which only till June 30, 2021 from previous timeframe of July 1 2020 till one-level of corporate entity relationship shall be considered. December 31, 2020. In the case of lenders providing credit to The additional adjustment also included the increased frequency employees or operational workers, debtors could file for relief for SME soft loan application to no more 2 times instead of only request directly as well as employers or business owners could once. also file for such request on their behalf; for instance, employee On January 12, 2021, the BOT had assessed the domestic welfare loan or other retail loans given the consent of debtors pandemic of the new waves of COVID-19 to be widespread in who are employees or operational workers, in order to facilitate many regions, affecting debtors directly and indirectly. Therefore, the efficiency and timeliness on the relief request.

The extended relief measures for retail customers impacted from COVID-19 are as follows.

Type Minimum Relief Measures

1. Credit cards Convert into loan of 48 installment or extend payment period according to debtor’s payment ability with interest rate ≤ 12% per annum

2. Personal loan under supervision: revolving loan 1. Reduce minimum installment payment according to payment ability or such as cash loan card 2. Convert into loan of 48 installment or extend payment period according to debtor’s payment ability with interest rate ≤ 22% per annum

3. Personal loan: installment payments and Reduce installment: at least 30% of previous installment with interest rate Auto title loan. ≤ 22%

4. Hire purchase 1. Debt payment holiday (principal and interest): 3-month or 2. Reduce installment by extending payment period

5. Housing loan or Home for Cash 1. Debt payment holiday (principal and interest): 3-month or 2. Debt payment holiday (principal): 3-month and reconsider interest rate as appropriate or 3. Reduce installment by extending payment period Annual Report 2020 083

2. For SMEs, financial institutions and SFIs shall provide 5. Forward-looking Statements financial assistance to qualified SMEs through payment deferment Thai economy in 2021 is likely to recover from recession, according to the Royal Decree Re: Financial Assistance to SME however, it is still full of high risks. It is expected to grow gradually affected by Coronavirus Pandemic. This included payment at 2.5 percent due to a major risk of COVID-19 resurgence, deferment on principal and/ or interest depending on debtor resulting in the restriction of domestic economic activities capability on a case-by-case basis given appropriate timeline throughout the first quarter, especially in terms of travel as well as but not exceeding end of June 2021. affecting the domestic demand. In addition, the continued 3. Financial assistance guideline for all types of debtors drought from the previous year is likely to affect farmers’ income (i.e. retails, SMEs and corporate clients with potentials) shall be correspondingly. Therefore, when considered together with the considered appropriately on loan types, debtors’ risk level, nature high level of household debt, it is anticipated to cause the private of business and impact regions for: consumption to expand in a constrained manner. Nevertheless, 3.1 Debt restructuring. For example, lower installment, the government is anticipated to expedite economic recovery payment extension, credit limits extension or maintenance, loan and rehabilitation policies, such as measures to remedy affected conversion from short-term to long-term, temporary payment people, together with accelerating the budget disbursements holiday on principal and/ or interest, lower interest rate than and executing measures to support consumption and investment market rate, appropriate reduction on principal prior to interest continuously in an attempt to help drive the economy and upon repayment, and etc. mitigate the impacts. As for monetary policy, the policy interest 3.2 Additional working capital and liquidity enhancement rate from the Bank of Thailand is projected to be fixed at a low 3.3 Consideration on payment deferment for SMEs with rate. Relating to the external factors, many of them spring out loans not exceeding Baht 100 million under the Emergency Royal from several risk factors. Besides the COVID-19 outbreak that Decree on Soft Loan continues to spread around the world affecting the demand for 3.4 Leniency on other terms and conditions as Thai products, the US international trade policy is still uncertain appropriate from the inauguration of President Joe Biden. Additionally, the container shortage problem in export as well as the appreciation Accounting Guidance on Temporary Relief of Thai Baht are together turning into risks that have a direct Measures for Entities Providing Assistance to Debtors impact on Thai exports. Impacted by Situations That Affect the Thai Economy Apart from the economic factors, the Bank also On February 28, 2020, the BOT had revised the regulations encounters many challenges. In particular, the stimulus from the for commercial banks to support customers under pre-emptive COVID-19 crisis has changed the consumer behaviors and measures. For Non-NPL customer as at January 1, 2020, bank expectations in the context of the New Normal era, especially could classify such loan as Stage 1 with no identification as in terms of having further digital lifestyles and demanding for troubled debt restructuring: TDR given that if it is foreseen that Personalization Experience services. The Great Reset, which will debt restructuring agreement could be complied by customer; place more emphasis on environmental and sustainability issues, moreover, bank could classify loan in performing stage if NPL shall play a significant role in the business operations of both the customer could make payment for 3 consecutive months or Bank and its customers. In the meantime, although the installments under the new debt restructuring agreement. This is advancement in terms of technology and data innovation helps applicable for debt restructuring during January 1, 2020 till increase the effectiveness of the Bank’s performance, they also December 31, 2021. convey challenges regarding the adaptation to keep up with Another measure involved provisioning, in which expected the rapid paces i.e., the risk management of cyber threats. This credit losses shall be calculated only for the drawn portion. matter also changes the competitive pattern, for example, the

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connection of banking business with other different ecosystems. empowering the Bank to build the Thailand Digital Platform by Conversely, the new players, such as FinTech, e-Commerce and Thai people for Thai people in the near future. Telco, shall exercise more roles in the competition. The Bank expected that the implementation of the To enable the Bank to achieve its objectives, vision and aforementioned strategic plans and schemes would assist and mission amidst the uncertain situations and various fluctuations, support the government policies, especially the Thailand 4.0 the business strategy of Krungthai Bank in 2021 shall remain its strategy, aiming for a cashless society and reducing inequality focus on operating business according to the 2 Banking Model - and gap from income distribution in the society. Moreover, this Carrier and Speedboat - simultaneously to enhance the Bank’s strategic execution would strengthen the Bank’s competitiveness growth. Thus, the Bank also placed importance on the 5 Execution in digital banking, support the Bank’s role as a pillar of the nation’s Pillars, consisting of ensuring the growth of main business, creating economy as well as elevate public trust towards the Bank. new business format, reducing the paper use, expanding business Accordingly, the Bank’s operations also correspond with the from Bank’s customers and endeavoring for sustainable growth. statement of direction, visions and missions that value all Besides, the Bank in 2021 will continue to stress importance on stakeholders - customers, society, employees and shareholders, 5 Ecosystems - Government, Payment, Healthcare, Education, in the continuous and sustainable growth of the Bank. Mass transit - which are the main target group and strength For further information in relation to the Bank’s direction, of the Bank. Various projects to be executed by the Bank shall plans and key projects in 2021, more details are presented on focus on inventing innovations that connect with 5 Ecosystems. page 47 in the Bank Directions, Plans and Key Projects in 2021. Apart from sustaining these Ecosystems, the Bank shall try its best However, regarding the forward-looking statements in connecting provided services to other ecosystems with the related to the analysis and other data (including operational intention to satisfy the daily needs of customers. project opportunities and the Bank’s business strategy) in this Attributable to the participation in laying foundation for Annual Report, such statements are the opinions of the Bank at Thai financial infrastructure through several projects previously, the present concerning the future situations but it is not a it enabled the Bank to acquire business opportunities from the guarantee for the Bank’s future performance of any kind. The extension of such projects. To be precise, new customers base actual future results may differ substantially from the information as well as the Bank deposits and loans have increased greatly. contained in this annual registration statement. Investors should The achievement has been reflected from the success of therefore consider and not be able to rely on the content Krungthai NEXT application, the state welfare card scheme and presented as forward-looking statements. Pracharat Blue Flag Shops nationwide. Apart from that, the Bank Therefore, when making investment decisions, investors has also accomplished the following projects: Rao Mai Ting Kan should exercise their caution and discretion in studying the Bank’s (No One Will Be Left Behind) campaign, “Khon La Khrueng” information in this Annual Report (Let’s Go Halves) scheme, Student Loan Fund, including Civil Servant Medical Benefit card scheme. Krungthai Bank, therefore, currently serves customers and Thai people of more than 40 million users, reinforcing the Bank to be a leader in establishing the country’s infrastructure. According to the big database acquired, it helps the Bank to assess the needs of customers accurately, support the business expansion of the target customers of the Bank effectively, reduce operating costs and generate income for the Bank sustainably. In 2021, Krungthai Bank still accelerates the development of a parallel digital system, namely open system - Pao Tang application and closed system - Krungthai NEXT mobile banking, in order to enable the Bank’s systems to accommodate for the growth from the extensive use of the platforms. At present, both platforms can facilitate more than 40 million users, making them the largest digital platforms in Thailand as of now. They are also the most efficient and stable systems on the cloud system, Annual Report 2020 085

Shareholding and Management Structure

1. Shareholding Structure List of Shareholders as at December 31, 2020 (book closing date)

Number of Shares Shareholders Ordinary Preferred Total % 1) The Financial Institutions Development Fund 7,696,248,833 0 7,696,248,833 55.05 2) Thai NVDR Co., Ltd 590,672,059 2,060 590,674,119 4.22 3) EGAT Saving and Credit Cooperative Limited 390,453,400 0 390,453,400 2.79 4) STATE STREET EUROPE LIMITED 366,852,651 0 366,852,651 2.62 5) Vayupaksa Mutual Fund 1 managed by MFC 304,775,658 2,726,095 307,501,753 2.20 6) Vayupaksa Mutual Fund 1 managed by KTAM 304,775,657 2,726,095 307,501,752 2.20 7) SOUTH EAST ASIA UK ( TYPE C) NOMINEES LIMITED 209,502,240 0 209,502,240 1.50 8) The Federation of Savings and Credit Cooperatives of Thailand Limited 197,862,800 0 197,862,800 1.42 9) Government Savings Bank 114,529,722 0 114,529,722 0.82 10) THE BANK OF NEW YORK MELLON 105,063,016 0 105,063,016 0.75 11) Other shareholders 3,695,325,214 45,750 3,695,370,964 26.43 Total 13,976,061,250 5,500,000 13,981,561,250 100.00 Note : Information from Thailand Securities Depository Co., Ltd., the Bank’s securities registrar The Bank’s Shareholding by Minority Shareholders (Free Float) The Bank compiled a list of shareholders as at December 31, 2020 and found that the Bank's shareholding by minor shareholders (free float) was equal to 44.95 percent of the paid capital. Financial Institutions Development Fund (FIDF) As of December 31, 2020, Financial Institutions Development Fund (FIDF) was the major shareholder of the Bank. The FIDF had 7,696,248,833 ordinary shares or 55.05 percent of total paid-up ordinary and preferred shares (or equivalent to 55.07 percent of total paid-up ordinary shares). Financial Institutions Development Fund has its status as both a part and a separate juristic person from the Bank of Thailand, established in 1985 as a means of providing financial assistance to financial institutions in need to prevent serious damage or impacts on the overall stability of the financial institution system. Financial Institutions Development Fund played a very important role in providing financial assistance to financial institutions facing difficulties during the 1997 financial crisis besides their obligations to guarantee the repayment of deposits and loans to depositors and creditors of financial institutions in order to strengthen the trust as well as maintaining the stability of the national financial institution system. Proportion of shares held by Thai nationality and foreign nationality shareholders:

Juristic Entity Individual Total Shareholder Number Number of Number Number of Number Number of Shares Shares Shares % Thai Nationality 626 10,689,251,265 77,130 1,741,182,617 77,756 12,430,433,882 88.91 Foreign Nationality 223 1,512,416,320 119 38,711,048 342 1,551,127,368 11.09 Total 849 12,201,667,585 77,249 1,779,893,665 78,098 13,981,561,250 100.00 Note : Information from Thailand Securities Depository Co., Ltd., the Bank’s securities registrar Shareholders can examine the details of the Securities Registrar for ordinary and preferred shares of the Bank in General Information and Other Major Information on page 348. 086

As of December 31, 2020, the Bank has 590,674,119 units of Non-Voting Depository Receipt (NVDR). The NVDR securities holders shall receive the same financial privileges as they would receive from direct investment in the Bank’s shares, such as getting dividends and rights offering to subscribe to new ordinary shares. However, there are no voting rights in shareholders’ meetings for NVDR holders, except for the rights to consider and vote for delisting of underlying securities from listed securities of the Stock Exchange of Thailand. Nevertheless, the number of NVDR shares is equivalent to 4.22 percent of the Bank’s ordinary shares for registered and paid-up capital and accounted for 9.41 percent of ordinary shares held by minor shareholders (free float). Minor Shareholders and investors can examine the number of NVDR shares on the website of the Stock Exchange of Thailand, www.set.or.th. Obligations incurred through the Issuance of Common Stocks - None -

2. Dividend Payment Policy 2.1 Dividend Payment Policy of the Bank The Bank has the policy to pay about 40 percent of its net profit as dividend. Nevertheless, dividend payment in each year is subject to realized profit from normal business operation in that particular year. Also taken into consideration were the future performance of the Bank as well as economic condition, financial factors involved, growth of credit extension and provisioning, resolution from the Board of Directors meeting and/or shareholders general meeting, retained earnings, legal and other provisioning as the Bank deems necessary and including the regulatory compliance under law, rules and regulation prescribed by the authorized regulators. The Bank paid interim dividend for the 2019 operating results according to the financial statements ended on December 31, 2019, audited by the Bank's auditor, to preferred shareholders at 0.9075 Baht per share and 0.7530 Baht per share for ordinary shareholders (calculated as 40.00% of net profit) on April 23, 2020 in order to reduce the impact that may occur to shareholders from postponement of the Annual Ordinary General Meeting due to the situation of the Coronavirus disease (COVID-19). Hence, in the 27th Annual General Meeting of Shareholders on July 10, 2020, the meeting acknowledged the interim dividend payment in stead of annual dividend payment for 2019 correspondingly.

2.2 Dividend Payment Policy of the Bank’s Subsidiaries Dividend payment of subsidiaries depends on each company’s operating performance, retained earnings, legal provisioning and other required provisioning as appropriate for business operation.

3. Management Structure 3.1 Organization Structure’s details are provided in Organization Chart on pages 8-9.

3.2 Members and Authorities of each Committee 3.2.1 The Board of Directors Members of the Board of Directors as at December 31, 2020 1) Mr. Krisada Chinavicharana Chairman of the Board of Directors 2) Mr. Krairit Euchukanonchai Vice Chairman, Chairman of Executive Directors, and Chairman of Risk Oversight Committee 3) Mr. Vichai Assarasakorn Director, Independent Director, Chairman of the Audit Committee and Member of the Corporate Governance and Social Responsibility Committee 4) Mr. Thanwa Laohasiriwong Director, Independent Director, Chairman of the Nomination and Remuneration Committee, Member of the Compliance Committee and Member of the Risk Oversight Committee 5) Prof. Dr. Kittipong Kittayarak Director, Independent Director, Chairman of the Corporate Governance and Social Responsibility Committee, and Member of the Compliance Committee 6) Mr. Teerapong Wongsiwawilas Director, Independent Director, Chairman of the Compliance Committee and Member of the Nomination and Remuneration Committee Annual Report 2020 087

7) General Tienchai Rubporn Director, Chairman of the Independent Directors Committee, Member of the Audit Committee and Member of the Compliance Committee 8) Mr. Poonnis Sakuntanaga Director, Executive Director and Member of the Risk Oversight Committee 9) Ms. Patricia Mongkhonvanit Director, Member of the Nomination and Remuneration Committee and Member of the Corporate Governance and Social Responsibility Committee 10) Ms. Nitima Thepvanangkul Director, Independent Director, Member of the Audit Committee and Member of the Corporate Governance and Social Responsibility Committee 11) Mr. Lavaron Sangsnit Director, Executive Director and Member of the Risk Oversight Committee 12) Mr. Payong Srivanich President, Executive Director and Member of Risk Oversight Committee Ms. Sineenard Damri-Anant Assistant Secretary Details of Changes of Directorship and Secretaryship 1) Mr. Prasong Poontaneat Took the position of Director on January 17, 2020 to replace Mr. Distat Hotrakitya, who resigned from the position of Director on July 15, 2019 Took the position of Chairman of the Board of Directors on January 17, 2020 Resigned from the position of Director and Chairman of the Board of Directors on October 1, 2020 2) Mr. Krisada Chinavicharana Took the position of Director on February 7, 2020 to replace Mr. Ekniti Nitithanprapas who resigned from the position of Director and Chairman of the Board of Directors on January 13, 2020 Took the position of Chairman of the Board of Directors on October 28, 2020 3) Mr. Teerapong Wongsiwawilas Took the position of Director on December 21, 2020 to replace Mr. Nontigorn Kanchanachitra, who resigned from the position of Director on September 20, 2020 4) Mr. Lavaron Sangsnit Took the position of Director on December 21, 2020 to replace Mr. Prasong Poontaneat, who resigned from the position of Director on October 1, 2020 5) Mr. Niruj Maneepun Resigned from the position of Secretary of the Board of Directors on April 22, 2020 Scope of Authority and Responsibility of the Board of Directors The Board of Directors has full authority to administer the business and supervise the business operations as a commercial bank in accordance with the objectives, the Articles of Association and the resolutions of the shareholders’ meetings. All of which must be subjected to relevant laws and regulations. The authority and responsibility includes:

Authority of the Board of Directors 1) All business activities of the Bank shall be under the authority of the Board of Directors. Either the President or at least two other directors as delegated by the Board have the authority to sign and affix the Bank’s official seal on behalf of the Bank. However, the Board of Directors has the authority to appoint or change the list of the directors who have the authority to sign on behalf of the Bank; 2) The Board of Directors has the authority to appoint the General Manager and employees as well as agent of the Bank with the authority and duty as the Board deems appropriate. Remuneration, expenses and benefits as well as removal of such persons from office are also within the authority; 3) The Board of Directors can empower the General Manager to appoint and revoke the appointment of the employees of the Bank. If the General Manager is also a director of the Board of Directors, he is named the “President”; 4) The Board of Directors has the authority to invite any person, as it deems appropriate, to be an advisor assisting the Board on banking business as well as determining wages and remuneration for the advisor; 5) If the Board of Directors view that the Bank has gained sufficient profits and it is appropriate to pay dividend, the Bank may from time to time pay interim dividend to shareholders and report in the next shareholders’ meeting. 088

Scope of Authority of the Board of Directors The Board of Directors shall have the power to conduct all kinds of business of the Company. However, certain kinds of business in accordance with the Limited Public Company Act, the Bank's regulations, including relevant laws and rules of related regulators are specified to be conducted under the power of the shareholders meeting. 1) Approval of the balance sheets and the profit and loss statements; 2) Approval of the profit appropriation; 3) Election of new directors replacing those who completed their term of office or election of the additional directors when there is an increase in the total number of directors; 4) Appointment of the Bank’s auditor and fixing their audit fee; 5) Increase of capital, reduction of capital and transfer of allowance for compensation of accumulated loss, dividend payment, public offering or allocation of capitalized shares and issuance of debentures; 6) Sale or transfer of the Bank’s entire business or some material parts, acquisition or acceptance of transfer of other business, amendment or termination of agreement relating to renting out partial or the entire Bank’s business. Responsibilities of the Board of Directors 1) Perform duties with responsibility, circumspection and honesty, complying with the laws, including oversee and manage the Bank’s business in accordance with the objectives, the Bank’s Articles of Association, the resolutions of the Board of Directors, and the resolutions of the shareholders meeting as well as supervising the Bank’s operations to sustainably create value for the Bank; 2) Specify the Bank’s visions, missions, objectives and business targets with annual review and approval; 3) Manage and oversee to ensure the Bank has good corporate governance in business operation, including determine an operation policy, a risk management policy with a regular review and assessment. Specify or approve of a good risk governance framework to support business operation according to the direction and objectives designated and supervise that instill organizational culture concerning risk culture; 4) Supervise to ensure an effective internal control which includes all activities in the Bank’s operation and able to reflect errors that may happen in due time, under the organizational structure complying with the ‘Three Lines of Defense’ model. Perform duty with independence and effectiveness; 5) Examine key plans, budget, and main resource distribution to achieve objectives and targets. Oversee that the Bank’s strategies are implemented as well as evaluate and supervise performance reporting; 6) Take into account the responsibility of the Board of Directors, respect the rights and treat the shareholders and stakeholders with fairness and transparency. Review and define roles and responsibilities of the Boards of Directors, the President, the Management to be in accordance with the organization’s direction, along with oversee that the effective Whistleblowing policy and procedure is enacted effectively; 7) Supervise that Market Conduct policy, the services which respond to customer needs with fairness, is enacted by an end- to-end process. Provide and manage platforms for complaints from all parties with efficiency and effectiveness. Set out policy to develop and improve the Bank’s operation with regard to security and sanitation, corporate social responsibility, environment and personnel development. 8) Oversee the succession plan and Top Executives development plan so that they are equipped with knowledge, skills, experiences, and essential characteristics necessary for driving the organization to achieve the targets. Supervise the annual assessment of the President, Top Executives and Board of Directors with effectiveness. Determine the remuneration structure to be in line with the organizational culture regarding risks. Provide remuneration fixing system for Top Executives with prudence, transparency and be justifiable with their duties and responsibilities, work performance that is in line with turnover both short term and long term; 9) Call for an Annual Ordinary General Meeting of Shareholders within four months from the closing of the accounting period. Other general meetings may be called anytime as extraordinary meeting when the Board of Directors deems appropriate or within one month from the date of shareholder’s written request; 10) Attend the meeting of the Board of Directors at least 75 percent of all meetings held in each year as well as the Annual Ordinary General Meeting of Shareholders except when having urgent matters. The Boards of Directors should also raise their opinions that benefit the meeting. Directors of the board which have potential conflicts of the interest in any agenda shall cease from voting on such matters and may be invited to leave the meeting temporarily by the Chairman; Annual Report 2020 089

11) The Board of Directors may appoint a sub-committee to support the directors according to the directors’ responsibilities and good corporate governance. One of the directors or more shall be delegated to be in the Sub-Committee and approve of the Sub-Committee Charter which specify its composition, responsibilities, and other matters relevant to the Sub-Committee as deemed appropriate; 12) Set out self-assessment, and assessment for directors and group assessment twice a year and implement the assessment results for the development of further operation and the consideration on the appropriateness of the Board of Directors’ composition. However, the Board of Directors shall invite any person, as it deems appropriate, to be an advisor assisting the Board of Directors in determining directions and recommending issue in performance evaluation of the Board of Directors criteria at the appropriate period of time, for example, every three year, and must disclose assessment operation in the annual report; 13) Comply with the Code of Best Practice of Directors of Listed Companies and Corporate Governance Code (CG Code). Role of the Chairman of Board of Directors Chairman of the Board of Directors, on behalf of the organization leader, has core duty and responsibility to oversee the benefits of the Bank, shareholders, and stakeholders to achieve utmost returns in a long run by means of gathering the capability, idea, creativity, and competency of Committees and the Management in driving the Bank’s business plan both short and long terms to accomplish success. In addition, Chairman has monitored management unit operation closely and continually by assigning directors to complete monthly reports of financial statements and important information. The Chairman is also the major person to support policy of corporate governance and corporate social responsibility, and aspiring to instill ethical consciousness to all level of staff members, according to the following details. Management Responsibility 1) Monitor the overview of the Bank strategy and policy to attain equality including giving fair treatment to all customers; 2) Put an emphasis on transparent lawful work operation under compliance of the government and the Bank along with the shareholder meeting’s resolution; 3) Supervise and ensure that the Board of Director’s perform their duties effectively and accomplish the Bank’s objectives and main targets; 4) Ensure that the Directors participate in supporting to create moral organizational culture and good corporate governance. Board of Directors Meeting 1) Take the role of the meeting’s chairman and attend every meeting except when having urgent matters in order to manage the Board of Directors meeting to be effective; 2) Set agenda of the Board of Directors meeting with consultant to the President and set out measure to put important issues in the meeting agenda; 3) Stimulate all Directors to raise their opinions by assigning authorized duty of organization management to the Management as deems appropriate. Ensure that all directors receive the Bank information correctly, on time, and clearly enough to perform their decision making, which will escort to the effective success of the Bank. Chairman shall provide time management for the Management to propose resolutions and for Directors to discuss important issues and consult each other. Support the Director consultancies in order to provide the consideration and opinion sharing about related topics in important meetings. Implement policy of maintaining good relationship between Executive Directors and Directors, and the Board of Directors and the management division with consultancies regularly. Development and Assessment in Working Process 1) All newly appointed Directors will be required to participate in the orientation program and pay a visit in the Bank’s business operation so as to familiarize with and adapt to organization culture; 2) Encourage all directors to join the training courses for competency development or related knowledge which will be advantages for the directors’ business operation in famous and acceptable institutions such as Thai Institute of Directors and The Stock Exchange of Thailand; 3) Support all directors to operate their business by collaborative working as a team to create efficiency and effectiveness in work. In addition, Board of Directors shall undergo the performance assessment, including self-assessment, cross-assessment, and group assessment, in order to take their results to improve and develop director’s work performance; 4) Determine the regular supervision and assessment system for the Bank operation to be in accordance with the policy. 090

Shareholder Relationship Monitor the communication between the shareholders to run effectively as well as provide them chances to communicate with Directors in order to exchange opinions. The Annual Ordinary General Meeting Chairman of the Board of Directors takes the chairman role at the Annual Ordinary General Meeting and assigns a responsive person to supervise the Annual Ordinary General Meeting to comply with law and regulations as well as monitor the meeting attendance of Directors. In this regard, shareholders are provided with the meeting rights including participation taking, voting, initiating questions, and requesting clarifications, annual report acknowledgement, approving the balance sheets and the profit and loss statements, approving the profit appropriation and dividend, appointing Directors and fixing Directors’ remuneration, appointing the Bank’s auditor, fixing their audit fee, and approving the amendment to the memorandum of association of the Bank. The Other Roles of Chairman of the Board of Directors Chairman of the Board of Directors performs duty with prudence and supervise the structure of the Board of Directors properly, stimulates to implement policy and decision making of Board of Directors effectively, supports activity of corporate governance and corporate social responsibility for Directors, Top executives and all staff members. Term of Office According to the term of office as stated in the Bank’s regulations, one-third of the members of the Board of Directors must retire from the position at every Annual Ordinary General Meeting. Each member of the Board of Directors may not be in the position for longer than three consecutive terms of office unless his qualifications justify it. The Board of Directors will consider the effectiveness of such director in performing his duties and explain the reason and his performance thereof to the shareholders. Authorized Signatory Directors During 2020, the Bank changed the authorized signatories of the Bank. From October 28, 2020 to the present, the authorized signatory of the Bank is as follows: “Mr. Payong Srivanich, President, is authorized to sign solely on behalf of the Bank affixed with the Bank’s official seal " 3.2.2 The Board of Executive Directors Members of the Board of Executive Directors as at December 31, 2020 1) Mr. Krairit Euchukanonchai Chairman of the Board of Executive Directors 2) Mr. Poonnis Sakuntanaga Director 3) Mr. Lavaron Sangsnit Director 4) Mr. Payong Srivanich Director Ms. Sineenard Damri-Anant Assistant Secretary Details of Changes of Directorship and Secretaryship 1) Ms. Patricia Mongkhonvanit Vacated the position of Executive Director on February 26, 2020 2) Mr. Krisada Chinavicharana Took the position of Executive Director on February 26, 2020 and resigned from the position of Executive Director on October 31, 2020 3) Mr. Lavaron Sangsnit Took the position of Executive Director on December 23, 2020 4) Mr. Niruj Maneepun Resigned from the position of Secretary of the Board of Executive Directors on April 22, 2020 Annual Report 2020 091

Authority and Responsibility of the Board of Executive Directors The Board of Directors has empowered the Board of Executive Directors with the following duties: 1) Approve scrutinizing credit, debt restructuring and debt write-off within the authority; 2) Approve investment or sales of securities invested by the Bank, trading or renting out Banks’ property within the authority; 3) Consider and approve the hiring of consultant and procurement operation in accordance with the procurement regulations; 4) Scrutinize business plan, policy tasks and annual budget; 5) Monitor significant assignments given by the Board of Directors; 6) Approve or acknowledge other businesses relating to management that deem necessary, appropriate or urgent to get problems resolved since they may cause damage to the Bank if unattended. Report such issue promptly to the Board of Directors; 7) Perform other tasks assigned by the Board of Directors. Term of Office of Executive Directors Equivalent to the Board of Directors’ term of office 3.2.3 The Audit Committee The Audit Committee as at December 31, 2020 1) Mr. Vichai Assarasakorn Chairman of the Audit Committee 2) General Tienchai Rubporn Director 3) Ms. Nitima Thepvanangkul Director Mr. Panabhand Hankijjakul Secretary The Audit Committee amended scope of authority and responsibility according to the Audit Committee Charter 2020/2021 (revised in November 2020), which was effective on December 10, 2020 The details are as follows: Scope of Authority and Responsibility of the Audit Committee 1) Financial Reporting and Public Disclosure 1.1) Review the financial reports to ensure their accuracy, adequacy and reliability in accordance with the generally accepted accounting principles; 1.2) Review with the Bank’s auditor key issues that may adversely affect the reliability of the financial reports such as: 1.2.1) Significant problems or conflicts encountered during the course of the audit; 1.2.2) Different facts and opinions between the auditor and the management; 1.2.3) Effectiveness of internal control; 1.2.4) Deficiencies or losses found in the current accounting period and the possibility to recur in the following periods; 1.2.5) The draft of the annual financial statements and notes to the financial statements; 1.2.6) The auditor’s report. 1.3) Review any connected transactions or transactions that may cause conflict of interest to ensure that the procedure is in accordance with related law, reasonable, and provide utmost benefits to the Bank; 1.4) Review the evidences when doubt about the operation that may significantly impair the Bank’s business or conflict of interest that may cause negative impact on the Bank’s operation; 1.5) Oversee the information submitted to the regulator to be in line with that in the financial reports. 2) Auditor 2.1) Ensure independence of the auditor; 2.2) Review the scope of work of auditor and internal auditors to avoid duplication of work in financial auditing with due consideration of efficiency in the use of resources in the audit process; 2.3) Consider the recruitment, appointment, dismissal and remuneration of the auditor and summit to the Board of Directors in proposing to the shareholder’s general meeting. The Committee together with the auditor held the meeting without the presence of the management at least once a year; 092

2.4) Review the annual audit report and may suggest reviewing or examining on significant or necessary issues before submitting the key recommendation to the Board of Directors. 3) Review the operations of the Bank that have significant risks to objectives, important changes in good governance and leading organization, strategic planning, risk management and internal control, emphasis on stakeholders and customers, digital technology development, human capital management and knowledge management and innovation. 4) Risk Management 4.1) Review crucial risk levels and risk assessment methods used by the internal auditor and the Bank’s auditor whether they are adequate and reliable; 4.2) Review the awareness of the Board of Directors and top executives on key risks and those related to strategic risk, credit risk, market risk, liquidity risk and operational risk. 5) Internal Control 5.1) Review the internal control system to ensure its effectiveness and compliance with the standards of the Committee of Sponsoring Organizations of Treadway Commission (COSO) and/or other standards as deemed appropriate. Assess the entire internal control system at least once a year. 5.2) Review the appropriateness and effectiveness of risk management, internal control of the Bank’s IT system and its security including business continuity plan. 6) Regulatory Compliance 6.1) Review all compliances with relevant laws, rules and regulations stipulated by the official authorities and the regulators so as to prevent the damages from penalty charges, warning as well as the reputation of the Bank and its executives. 6.2) Supervise the financial conglomerate 6.2.1) Supervise and monitor the operation to be in line with the financial conglomerate policy; 6.2.2) Review accuracy and adequacy of financial report of the financial conglomerate 6.3) Review the accuracy of references and self-assessment of the anti-corruption measures of the Bank according to Thailand’s Private Sector Collective Action Coalition Against Corruption Project. 7) Internal Auditor 7.1) Ensure independence of the internal auditor; 7.2) Directly supervise the Internal Audit Group, excluding the management of the Internal Audit Group that report directly to the President; 7.3) Oversee the Internal Audit Group to adhere to moral ethics and corporate governance with generally accepted audit standards as well as examine and review Code of Conduct of audit officers prior to submission to the Board of Directors for approval; 7.4) Regularly examine and review the Charter of the Internal Audit Group and operation practice manual of the Internal Audit Group; 7.5) Consider and approve the strategic plan for internal audit, organization structure, manpower, annual internal audit program as well as budget used in auditing, stressing efficiency and effectiveness including their prioritization with regard to risk levels; 7.6) Review the internal audit reports and call a meeting with Group Head of the Internal Audit Group without the executives and the management to see if there is any interference from the executives and the management that may cause negative impacts on the independence and freewill of the internal auditor; 7.7) Oversee the complaint and Whistleblowing reported to the Internal Audit Group to ensure the appropriate audit; 7.8) Review with the Internal Auditor Group Head of competency to be in accord with policy or the competency of Bank’s use of property or work manual; 7.9) Investigating and considering with the management division in the matter of errors found and the response of the Management; 7.10) Submit opinions to the Board of Directors concerning the appointment, transfer, dismissal, remuneration fixing and appraisal of the Internal Audit Group Head and all internal auditors of the Internal Audit Group; 7.11) Assess the performance of the Internal Audit Group Head; 7.12) Perform the Independent Quality Assessment Review by external auditor at least every five years. Annual Report 2020 093

8) Performance Assessment: Conduct self-assessment and the Board of Directors will evaluate the annual performance of the Audit Committee. 9) Establishment/Review of Charter of the Audit Committee and the Operation Practice Manual of the Audit Committee 9.1) Establish and review Charter of the Audit Committee at least once a year before submitting to the Board of Directors for approval. 9.2) Establish the operation practice manual of the Audit Committee at least once a year before submitting to the Board of Directors for approval. 10) Other Responsibilities 10.1) Authorized to audit or investigate concerned persons under the scope of authority and responsibility of the Audit Committee and to hire specialist to assist in auditing or investigation; 10.2) Perform other duties as assigned by the Board of Directors, which is under the responsibility of the Audit Committee. Term of Office 1) The Audit Committee has a three-year term of office. One year refers to the period from the Ordinary General Meeting of the year in which the Director is appointed to the next Ordinary General Meeting. A director completing the term of office is eligible for re-election. Moreover, the Bank has stipulated additional provisions concerning the appropriateness of Director’s term of office that it should not be over two consecutive terms except that any Director is considered appropriate to take the director office longer than such term. In this regard, the Board of Directors shall consider the independence and performance efficiency of that director before extending the term of office for more than two consecutive terms. The extension of such term shall not be permitted automatically. 2) The Directors in Audit Committee shall terminate from the position under the following circumstances: 2.1) Complete the term of office; 2.2) Terminate from directorship of the Bank’s Board of Directors; 2.3) Resignation; 2.4) Death 2.5) Lacking of qualifications as Audit Committee under the regulations prescribed by the Bank or SET; 2.6) Have resolution to terminate from the position approved by the Board of Directors; 2.7) Receive final judgment to imprisonment or lawful order to imprisonment except the negligent offence or petty offenses; 2.8) Being quasi incompetent or adjudged incompetent; 2.9) Bankruptcy. 3) For the resignation of Audit Committee Director, the letter of resignation must be submitted in advance to the Chairman of the Board of Directors for at least 30 days, excluding in the case of further necessity occurred, for the Board of Directors to approve. 4) In case the Audit Committee Directors has left the position prior to the completion of office term, the qualified person will be selected by the Board of Directors and will stay only for the remaining tenure of the director who left. Member of the Audit Committee with experiences in reviewing financial statement Gen. Tienchai Rubporn Director Ms. Nitima Thepvanangkul Director In this regard, the report of the Audit Committee was conducted and presented on pages 188-189. 3.2.4 The Corporate Governance and Social Responsibility Committee The Corporate Governance and Social Responsibility Committee as at December 31, 2020 1) Prof. Dr. Kittipong Kittayarak Chairman 2) Mr. Vichai Assarasakorn Director 3) Ms. Patricia Mongkhonvanit Director 4) Ms. Nitima Thepvanangkul Director Mr. Krit Chamapisit Secretary 094

Details of Change of Directorship 1) Mr. Nontigorn Kanchanachitra Resigned from the position of Director of the Corporate Governance and Social Responsibility Committee on September 20, 2020 Scope of Authority and Responsibility of the Corporate Governance and Social Responsibility Committee 1) Present policy on corporate governance and social responsibility of the Bank and subsidiaries to the Board of Directors; 2) Oversee that operations are in compliance with the principles of corporate governance stipulated by the regulators such as the Bank of Thailand, the Stock Exchange of Thailand and the Securities and Exchange Commission, together with bearing the social responsibility; 3) Regularly review the corporate governance and social responsibility policy to be in consonance with international practices and recommendations of related institutions; 4) Recommend Code of Best Practices or Board of Directors Charter to the Board of Directors as well as other established committees of the Bank; 5) Recommend Code of Business Conduct and Code of Best Practices for executives and all employees; 6) Promote the dissemination of a culture of the good corperate governance and participation in social activities for sustainable development to be understood at all levels and to be effective in practice. 7) Appoint sub-committee to support corporate governance and social responsibility work as deemed appropriate; 8) Perform other tasks assigned by the Board of Directors. 3.2.5 The Nomination and Remuneration Committee The Nomination and Remuneration Committee as at December 31, 2020 1) Mr. Thanwa Laohasiriwong Chairman 2) Ms. Patricia Mongkhonvanit Director 3) Mr. Teerapong Wongsiwawilas Director Mr. Suppawat Wadhanapatee Secretary Mr. Boonchird Pikulyam Assistant Secretary Mr. Thanakorn Karnjananut Assistant Secretary Details of Changes of Directorship and Assistant Secretaryship 1) Ms. Patricia Mongkhonvanit Took the position of Director of the Nomination and Remuneration Committee on February 26, 2020 2) Mr. Nontigorn Kanchanachitra Resigned from the position of Chairman of the Nomination and Remuneration Committee on September 20,2020 3) Mr. Thanwa Laohasiriwong Took the position of Chairman of the Nomination and Remuneration Committee on December 23, 2020 4) Mr. Teerapong Wongsiwawilas Took the position of Director of the Nomination and Remuneration Committee on December 23, 2020 5) Mr. Thanakorn Karnjananut Took the position of Assistant Secretary of the Nomination and Remuneration Committee on October 4, 2020 Scope of Authority and Responsibility of the Nomination and Remuneration Committee The Nomination and Remuneration Committee has scope of duties and responsibilities as assigned by the Board of Directors to take action on various issues as written in Charter of the Nomination and Remuneration Committee as well as reporting the result of the Committee meeting to the Board of Directors every time. Details are summarized as follows: 1) Set policy, criteria and procedure in nominating candidates and fixing remuneration including other benefits for the directors, top executives and authorized person; 2) Recommend overall policy concerning the fixing of remuneration and other benefits; Annual Report 2020 095

3) Select and propose candidates with appropriate qualifications as specified by the Bank’s rules, regulations and relevant laws to be presented to the Board of Directors for appointment consideration of the positions as follows: 3.1) Director 3.2) Member of respective committees directly delegated by the Board of Directors 3.3) Top executives and authorized person 4) Oversee that the size of the Board of Directors is justifiable and appropriate for the organization and the changing environment. The Board of Directors must comprise of the personnel with knowledge, skill and experience in various areas; 5) Activate the Board of Directors to select new director to replace the one that has completed term of office according to the Articles of Association; 6) Oversee that directors, top executives and authorized persons’ remunerations are justifiable with their duties and responsibilities. Remunerations are adjusted in accordance with additional duties and responsibilities of such director; 7) Set up guidelines for assessing the performance of directors, top executives and authorized management personnel when revising annual compensations and takings into consideration the duties, responsibilities, related risks and long term value creation for shareholders; 8) Disclose policy and details of recruiting procedures and fixing of remuneration, all types of benefits and conduct the report regarding the process of determining remuneration. Thus, the details relating to the objectives, operational performance, and comment of the Nomination and Remuneration Committee must be disclosed in the Bank’s Annual Report; 9) Perform other tasks as assigned by the Board of Directors. 3.2.6 The Risk Oversight Committee The Risk Oversight Committee as at December 31, 2020 1) Mr. Krairit Euchukanonchai Chairman 2) Mr. Poonnis Sakuntanaga Director 3) Mr. Thanwa Laohasiriwong Director 4) Mr. Lavaron Sangsnit Director 5) Mr. Payong Srivanich Director Mr. Poonpat Sripleng Secretary Detail of Change of Directorship 1) Mr. Lavaron Sangsnit Took the position of Director of the Risk Oversight Committee on December 23, 2020. Scope of Authority and Responsibility of the Risk Oversight Committee The Risk Oversight Committee is responsible for advising the Board of Directors on the risk oversight framework of the Bank and the financial conglomerate, ensuring that top executives and the head of the risk management department comply with the risk management policy and strategy, including acceptable risk levels. The Committee also has the duty to give an opinion or participate in assessing the efficiency and operational effectiveness of the head of the risk management department, ensure that management of capital, liquidity, information technology and the risk factors of the Bank and the financial conglomerate are in line with the acceptable risk levels, and review the adequacy and effectiveness of the policy and overall risk management strategies, including the acceptable level of risk at least once a year or when there are significant changes. The Risk Oversight Committee shall assess that the risk management policies and strategies of Bank and financial conglomerate cover all types of risks, including new risks that may occur. The Committee also effectively implements the said policies and strategies, reports to the Board of Directors about risk management efficiency and status of risk management compliance as well as significant factors, problems and issues that need to be improved to comply with the risk management policies and strategies of the Bank and the financial conglomerate. Correspondingly, the Risk Oversight Committee shall report to the Board of Directors on the results of risk management actions in extraordinary or emergency situations when the Business Continuity Plan (BCP) has been announced for execution, including report on the events that have significant impacts on the Bank's operating results and capital. Morever, the report of the Risk Oversight Committee shall be submitted to the Audit Committee and the Board of Directors for acknowledgment/consideration on quarterly basis. The Risk Oversight Committee shall hold the meeting at least once a month or as deemed appropriate and performs other duties as assigned. 096

3.2.7 The Compliance Committee The Compliance Committee as at December 31, 2020 1) Mr. Teerapong Wongsiwawilas Chairman 2) Mr. Thanwa Laohasiriwong Director 3) Prof. Dr. Kittipong Kittayarak Director 4) Gen. Tienchai Rubporn Director Mr. Pongsit Chaichatpornsuk Secretary Detail of Changes of Directorship and Secretaryship 1) Mr. Teerapong Wongsiwawilas Took the position of Chairman of the Compliance Committee on December 23, 2020 2) Mr. Pongsit Chaichatpornsuk Took the position of Secretary of the Compliance Committee on October 1, 2020 to replace Mr. Niruj Maneepun, who resigned from the position on April 22, 2020. 3) Ms. Vipawadee Lerssrisuriya Resigned from the position of Assistant Secretary of the Compliance Committee on December 16, 2020 (Currently, there is no person taking the position of Assistant Secretary.) Scope of Authority and Responsibility of the Compliance Committee The Compliance Committee has duties and responsibilities as appointed by the Board of Directors as follows: 1) Ensure that the Bank manages risks arising from non-compliance with laws and regulations accordingly by the compliance departments; 2) Review the Charter of the Compliance Committee and the Charter of the Compliance Department at least once a year or when there is any significant changes before submitting to the Board of Directors for approval; 3) Assess annual performance of the Compliance Department to maintain independence and avoid conflict of interest. Review policy and regularly assess efficiency of risk management in regulatory compliance to ensure that the Bank’s regulatory compliance is appropriate; 4) Approve the Annual Compliance Report; 5) Review the review report or monitor the regulatory compliance. It may be asked to review or monitor transactions that default on compliance and the Bank considered them as being important cause of risk; 6) Report to the Board of Directors to acknowledge the results of the regulatory review or the results of monitoring the regulatory compliance, as well as taking action to improve or resolve in case of non-compliance. 3.2.8 The Independent Directors Committee The Independent Directors Committee as at December 31, 2020 1) Gen. Tienchai Rubporn Chairman 2) Professor Dr. Kittipong Kittayarak Director 3) Mr. Thanwa Laohasiriwong Director 4) Mr. Vichai Assarasakorn Director 5) Ms. Nitima Thepvanangkul Director 6) Mr. Teerapong Wongsiwawilas Director Ms. Sineenard Damri-Anant Assistant Secretary Details of Changes of Directorship and Secretaryship 1) Mr. Teerapong Wongsiwawilas Took the position of the Independent Director on December 21, 2020 2) Mr. Niruj Maneepun Resigned from the position of Secretary of the Independent Directors Committee on April 22, 2020 3) Ms. Vipawadee Lerssrisuriya Resigned from the position of Assistant Secretary of the Independent Directors Committee on October 15, 2020 Annual Report 2020 097

Duties and Responsibilities of the Independent Directors Committee 1) Recommend agenda of meeting to the Chairman of the Board of Directors for the issue that is deemed as important or issues that should be considered by the Board and not yet included on the agenda; 2) Provide opinions to the Chairman of the Board of Directors regarding to the role and performance of the Board; 3) Support the Board of Directors in boosting efficiency in complying with the principles of good corporate governance; 4) In case where the Board of Directors consider material agenda items such as related-party items or significant property trading, Independent Directors of over half the total number of Independent Directors should join in the consideration of such material agenda items; 5) In case where the Independent Directors may have conflicting opinions or any other observations on agenda items under consideration by the Board of Directors meeting, such opinions or observations should also be recorded in the minutes of the Board of Directors meeting every time; 6) Monitor the performance by the Independent Directors who have been designated to take position in various subcommittees especially in the issues of regulatory compliance, international accounting standards and risk management; 7) Perform any other tasks as assigned by the Board of Directors. Term of Office Independent Director can hold the term of office not to exceed 9 consecutive years. Independent Director who has previously held the position for 9 consecutive years is eligible to be re-appointed, however; such Independent Director must terminate from the appointment as director, manager, management authority, advisor or staff member of the Bank and the Bank’s financial conglomerate for at least 2 years before the date of submission for directorship approval to the Bank of Thailand.

3.3 List of the Corporate Secretary The Board of Directors has appointed the Corporate Secretary since 2008 respectively. At present, Mr. Payong Srivanich, the President, has been assigned as the Corporate Secretary since July 8, 2020 with the purpose to comply with the amended Securities and Exchange Act B.E. 2535 (1992) and the Bank’s principles of good corporate governance. Details of main duties and responsibilities of the Corporate Secretary are as follows: Scope of Responsibility of the Corporate Secretary 1) Oversee activities of the Board of Directors to be in compliance with the relevant applicable laws, rules and regulations; 2) Organize shareholders general meeting and the Board of Directors meeting to be in compliance with the relevant laws and the Bank’s Articles of Association and monitoring those actions executed according to the meeting resolution for accuracy and compliance; 3) Prepare and retain the following documents: - Director registration - Invitation letter of the Board of Directors meeting, minutes of such meeting and the annual report of the company - Invitation letter of shareholders general meeting and minutes of such meeting 4) Retain the reports on interest reported by Directors and executives; 5) Monitor the actions taken in accordance with the resolutions of the Board of Directors meeting and shareholders general meeting; 6) Provide appropriate recommendations to Directors concerning legal matter, rules and regulations of the Bank; 7) Oversee corporate governance issues; 8) Be a consultant and coordinate with the secretaries of the committees; 9) Contact and communicate with shareholders to be informed of various rights of shareholders; and news of the Bank; 10) Perform any other actions as specified in the Notification of the Capital Market Supervisory Board. 098

3.4 Board of Directors Meeting Dates of the Board of Directors meeting have been set in advance throughout the year and the meetings in 2020 shall be held on the second and the fourth Wednesday of each month. Special sessions may be held when appropriate. Corporate secretary shall send the invitation, agenda and related document to the Directors at least 7 days before the meeting date. Corporate secretary will note the minutes and retain for audit after the Board of Directors’ approval. Meeting agenda will be categorized into headings for efficiency of the meeting, such as Chairman’s Statement for information, adoption of previous meeting’s minutes, on-going issues, policies, loan, debt restructuring, investment, property trading and procurement, human resources issue, issue for information and other business topics. In 2020, the Board of Directors held a total of 26 meetings, the Board of Executive Directors 46 meetings, the Audit Committee 22 meetings, the Nomination and Remuneration Committee 20 meetings, the Corporate Governance and Social Responsibility Committee 13 meetings, the Risk Oversight Committee 12 meetings, the Compliance Committee 12 meetings, the Independent Directors Committee 4 meetings and the Relations Affairs Committee 12 meetings. Details of each Director’s attendance are as follows:

Nomination Board of Risk Independent Relations Board of Audit and CG and CSR Compliance Executive Oversight Directors Affairs Name of Directors Directors Committee Remuneration Committee Committee Directors Committee Committee Committee Committee 1) Mr. Krisada Chinavicharana (1) 23/24 30/33 ------2) Mr. Krairit Euchukanonchai 25/26 44/46 - - - 12/12 - - - 3) Mr. Vichai Assarasakorn (2) 25/26 - 22/22 - 12/13 - - 4/4 1/1 4) Mr. Thanwa Laohasiriwong (3) 26/26 - - 20/20 - 12/12 12/12 4/4 - 5) Professor Dr. Kittipong Kittayarak 26/26 - - - 13/13 - 12/12 4/4 - 6) Mr. Teerapong Wongsiwawilas (4) 1/1 - - - - - 1/1 1/1 - 7) Gen. Tienchai Rubporn 26/26 - 22/22 - - - 12/12 4/4 - 8) Mr. Poonnis Sakuntanaga 24/26 46/46 - - - 12/12 - - - 9) Ms. Patricia Mongkhonvanit (5) 25/26 5/6 - 16/16 12/13 - - - - 10) Ms. Nitima Thepvanangkul 26/26 - 22/22 - 12/13 - - 3/4 - 11) Mr. Lavaron Sangsnit (6) 1/1 - - - - 0/1 - - - 12) Mr. Payong Srivanich 26/26 43/46 - - - 11/12 - - - Directors who resigned during the year 1) Mr. Ekniti Nitithanprapas (7) 0/0 ------2) Mr. Prasong Poontaneat (8) 16/18 ------3) Mr. Nontigorn Kanchanachitra (9) 17/17 - - 14/14 9/9 - - - 9/9 Notes Number in the table refers to the number of attendance/ number of Board Meeting held while acting as Director. (1) Took the position of Director on February 7, 2020, took the position of Executive Director on February 26, 2020, took the position of Chairman of the Board of Directors on October 28, 2020 and resigned from the position of Executive Director on October 31, 2020. (2) Took the position of Chairman of the Relations Affairs Committee on December 23, 2020. (3) Change of position from Chairman of the Compliance Committee to be Director of Compliance Committee and change of position from Director of the Nomination and Remuneration Committee to be Chairman of the Nomination and Remuneration Committee on December 23, 2020. (4) Took the position of Director and Independent Director on December 21, 2020 and took the position of Chairman of the Compliance Committee and Director of the Nomination and Remuneration Committee on December 23, 2020. (5) Resigned from the position of Executive Director and took the position of Director of the Nomination and Remuneration Committee on February 26, 2020. (6) Took the position of Director on December 21, 2020, took the position of Executive Director and Director of the Risk Oversight Committee on December 23, 2020. (7) Resigned from the position of Chairman and Director of the Board of Directors on January 13, 2020. (8) Resigned from the position of Chairman and Director of the Board of Directors on October 1, 2020. (9) Resigned from the position of Director, Chairman of the Nomination and Remuneration Committee, Director of the Corporate Governance and Social Responsibility Committee and Chairman of the Relations Affairs Committee on September 20, 2020. Besides, the Board of Directors has a policy to oversee the Management in accordance with good corporate governance principles. The policy is to organize a meeting of the Board of Directors without the Management at least once a year in order that the Board of Directors can consider and share their opinions concerning their duties and responsibilities. In 2020, there were 3 meetings of the Board of Directors without the Management. Annual Report 2020 099

3.5 Remunerations for the Board of Directors 3.5.1 Policy on Remunerations for the Board of Directors The Bank structures its policy on fair and reasonable remunerations with the reviewing of the Nomination and Remuneration Committee. The consideration of remuneration must be in line with the Director’s responsibilities and the Bank’s financial status and overall world economic outlook; must be comparable to the remuneration of the peers; and must be in complying with the resolution approved by the shareholders meeting. Remuneration process is prescribed as follows: - The Nomination and Remuneration Committee considers and reviews the appropriateness according to the remuneration policy for the Board of Directors and committees of the Bank to propose to the Board of Directors; - The Board of Directors proposes all forms of remuneration for directors to shareholders for consideration and approval annually, including supporting information: Directors’ Remuneration Policy, criteria for remuneration for each director for their position and remuneration; - Disclose remuneration for directors, both monetary and non-monetary remuneration in the annual report The 27th Shareholders Ordinary Annual General Meeting (2020) approved the remuneration of Directors, which was divided into 3 parts as follows: 1) Monthly remuneration (according to the term of office); 2) Meeting honorarium shall be paid to the Directors in complying with the specified regulations. 2.1) Meeting honorarium for the Board of Directors (only for member of the Board of Directors who attend the meeting for once a month); 2.2) Meeting honorarium for sub-committees, the Relations Affairs Committee or other committees (only for the directors who attend the meeting, for a total of not more than two committees and not more than once a month for each committee) 3) Directors’ gratuity is subject to the following criteria: 3.1) The Bank must obtain profit from its operation, and 3.2) The Bank must pay dividend to the shareholders 100

Details of Remunerations for Krung Thai Bank Pcl.’s Directors Per Person 1. Monthly remuneration (According to the term of office); 1.1 Chairman of the Board of Directors Baht 160,000.- / Month 1.2 Member of the Board of Directors Baht 80,000.- / Month 2. Meeting honorarium 2.1 Meeting honorarium for the Board of Directors (Only for member of the Board of Directors who attend the meeting for once a month. However, in case that there is a reasonable incident, it may consider paying meeting honorarium more than once a month but not more than 15 times per year.) - Chairman of the Board of Director - Member of the Board of Director 2.2 Meeting honorarium for respective committees, the Relations Affairs Committee or other committees (only for the directors who attend the meeting, for a total of not more than two committees and not more than once a month for each committee) - Chairman Baht 37,500.- / Time - Director Baht 30,000.- / Time

Until presently, besides the approval from the shareholders’ meeting, the Bank has not offered any other privilege to the Directors. 3.5.2 Remunerations for the Board of Directors in 2020 In 2020, the Bank paid monetary remuneration, consisting of the monthly remuneration and meeting honorarium for the Directors in the Board of Directors in total of Baht 26,928,038.74. It is divided into: 1. Remuneration for the Directors in the Board of Directors with a total amount of Baht 17,895,861.30 2. Remuneration for the members in the Board of Executive Directors with a total amount of Baht 1,613,709.68, for the Audit Committee Baht 1,313,709.68, for the Nomination and Remuneration Committee Baht 1,111,209.68, for the Corporate Governance and Social Responsibility Committee Baht 1,733,709.68, for the Risk Oversight Committee Baht 1,343,709.68, for the Compliance Committee Baht 1,253,709.68, for the the Independent Director Committee Baht 293,709.68, for the Relations Affairs Committee Baht 338,709.68, and for the Remuneration Subcommittee for the President of Krung Thai Bank Pcl. Baht 30,000.00. Details of the remuneration are as follows: Annual Report 2020 101

(10)

------Unit : Bath 30,000.00 30,000.00 Remuneration the President 26,928,038.74 Subcommittee for ------Affairs 37,500.00 338,709.68 Relations 301,209.68 Committee ------30,000.00 Directors 293,709.68 263,709.68 Committee Independent ------37,500.00 360,000.00 300,000.00 556,209.68 Committee Compliance 1,253,709.68 ------60,000.00 593,709.68 330,000.00 360,000.00 Committee 1,343,709.68 Risk Oversight Risk Oversight ------180,000.00 330,000.00 593,709.68 300,000.00 330,000.00 CG and CSR CG Committee 1,733,709.68 Monetary Remuneration (Baht) ------330,000.00 481,209.68 300,000.00 Committee 1,111,209.68 Remuneration Nomination and ------593,709.68 360,000.00 360,000.00 1,313,709.68 Audit Committee ------60,000.00 Board of Directors Executive Executive 240,000.00 593,709.68 360,000.00 360,000.00 1,613,709.68 Board of 88,387.10 88,387.10 77,419.35 Directors 987,763.44 1,537,936.59 1,437,096.77 1,437,096.77 1,437,096.77 1,993,387.11 1,437,096.77 1,437,096.77 1,625,806.45 1,437,096.77 1,437,096.77 1,437,096.77 17,895,861.30 ( 1 ) ( 9 ) ( 5 ) ( 4 ) ( 7 ) ( 3 ) ( 2 ) ( 8 ) ( 6 ) Chinavicharana Nitithanprapas Rubporn Wongsiwawilas Euchukanonchai Thepvanangkul Poontaneat Kanchanachitra Srivanich Sakuntanaga Laohasiriwong Assarasakorn Sangsnit Mongkhonvanit

Took the position of Director on February 7, 2020, took Executive 26, Chairman Board Directors October 28, 2020 and resigned from Oct ober 31, 2020. Took the position of Chairman Relations Affairs Committee on December 23, 2020. Change of position from Chairman the Compliance Committee to be Director and change Nomination Remuneration on December 23, 2020. Took the position of Director and Independent on December 21, 2020 took Chairman Compliance Committee Nomination Remuneration 23, 2020. Resigned from the position of Executive Director and took Nomination Remuneration Committee on February 26, 2020. Took the position of Director on December 21, 2020, took Executive and Risk Oversight Committee 23, 2020. Resigned from the position of Chairman and Director Board Directors on January 13, 2020. Resigned from the position of Chairman and Director Board Directors on October 1, 2020. Resigned from the position of Director, Chairman Nomination and Remuneration Committee, Director Corporate Governance Social Responsibility Committee Relations Affairs on September 20, 2020. Meeting honorarium for the Remuneration Subcommittee President of Krung Thai Bank Pcl.

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Name of Directors Mr. Krisada Mr. Ekniti Prof. Dr. Kittipong Kittayarak Gen. Tienchai Mr. Teerapong Mr. Krairit Ms. Nitima Mr. Prasong Mr. Nontigorn Mr. Payong Mr. Poonnis Mr. Thanwa Mr. Vichai Mr. Lavaron Ms. Patricia 1 ) 1) 5 ) 7 ) 6) 2 ) 2) 3) 8 ) 4 ) 3 ) 9 )

Meeting honorarium for respective committees shall be paid a total of not more than 2 and once m onth each committee. Therefore, if any committee member attend meetings committees, the meeting s hall only. Notes: Total remuneration of Board Directors Total remuneration of respective committees Total remuneration of the Board Directors and all Respective Committees

Directors who resigned during the year

10 ) 12 )

11 )

102

3.5.3 Remunerations of the Bank’s Directors Serving as Directors in the Bank’s Subsidiaries in 2020 There is one director, namely Mr. Krairit Euchukanonchai, taking the position of Chairman of the Board of Directors for Infinitas By Krungthai Co., Ltd. without receiving remuneration. 3.5.4 Gratuity Payment of the Directors in 2019 The Board of Directors allocated a total of Baht 41,270,000.00 as gratuity for Directors in 2019. The details are as follows:

Unit: Baht Name of Directors/Former Directors * Gratuity 1) Mr. Krairit Euchukanonchai 4,057,658.51 2) Mr. Vichai Assarasakorn 3,550,451.19 3) Mr. Thanwa Laohasiriwong 3,198,880.10 4) Professor Dr. Kittipong Kittayarak 3,410,100.68 5) Gen. Tienchai Rubporn 3,410,100.68 6) Mr. Poonnis Sakuntanaga 3,550,451.19 7) Ms. Patricia Mongkhonvanit 3,550,451.19 8) Ms. Nitima Thepvanangkul 2,201,140.78 9) Mr. Payong Srivanich 3,550,451.19 10) Mr. Ekniti Nitithanprapas * 4,564,865.82 11) Mr. Nontigorn Kanchanachitra * 3,550,451.19 12) Mr. Distat Hotrakitya * 1,896,816.39 13) Mr. Somchai Boonnamsiri * 778,181.09 Total 41,270,000.00

3.6 Executives of the Bank 3.6.1 The President The President is empowered to oversee that the management and business operation of the Bank is in accordance with the objectives, policies, rules, and targets as formulated and set by the Board of Directors, including manage work with restriction to the plan or budget approved by the Board of Directors and for the benefit of the Bank and the shareholders with the following responsibilities: 1) Oversee that the operation of the Bank is in accordance with the objectives, policies, rules and targets designated by the Board of Directors. 2) Manage work with restriction to the plan or budget approved by the Board of Directors and for the benefit of the Bank and the shareholders. 3) Supervise employees and contract staff to work in accordance with the objectives and authority of the Bank 4) Build and maintain relationships and collaborations with various agencies, institutions and organizations, both onshore and offshore. 5) Represent or be an authorized person on behalf of the Bank when dealing with external agencies and regulators or conducting any legal acts with legal binding as assigned by the Board of Directors within the framework of the Bank’s objectives and Articles of Association. 6) Attend meetings and take directorship or membership of committee as appointed by the Bank. 7) Consider any other topics as designated by the Board of Directors and respective committees. Annual Report 2020 103

Assessment of the President Performance In 2020, the Bank assessed performance of the President by determining performance appraisal result to be associated to the incentive system once a year, and during the year, providing a performance appraisal in order to give feedback as follows: 1) The Nomination and Remuneration Committee reviewed, specified performance evaluation criteria in relation to key performance indicator (KPI), considered an annual remuneration adjustment and presented to the Board of Directors for approval. 2) The Board of Executive Directors considered key performance indicators (KPI) that are consistent and appropriate to the current situation and the strategic goals of the Bank. As a result, the Board of Directors can measure and reflect the performance noticeably and completely in all dimensions. 3) Human Resources and Corporate Governance Group in collaboration with Financial Management Group presented the President’s performance, including the appraisal result that associated with the incentive system to the Board of Directors. 4) The Board of Directors informed the performance appraisal result to the President. 3.6.2 Top Executive Officers Names and Positions of Top Executive Officers as of December 31, 2020 (according to the organization structure on pages 8-9

Name-Surname Position Group 1. Mr.Payong Srivanich President 2. Mr. Poonpat Sripleng Senior Executive Vice President Group Head Risk Management Group 3. Ms. Praralee Ratanaprasartporn Senior Executive Vice President Group Head Digital Solutions Group 4. Mr. Werapong Suppasedsak Senior Executive Vice President Group Head Business Center Group 5. Mr. Suratun Kongton Senior Executive Vice President Group Head Corporate Banking Group 2 6. Mr. Rawin Boonyanusasna Senior Executive Vice President Group Head Global Markets Group 7. Mr. Ekachai Techawiriyakul Senior Executive Vice President Group Head Corporate Banking Group 1 8. Ms. Saranya Vejakul Senior Executive Vice President Group Head Financial Management Group 9. Mr. Santi Parivisutt Senior Executive Vice President Group Head Operation Group 10. Mr. Suppawat Wadhanapatee Senior Executive Vice President Group Head Human Resources and Corporate Governance Group 11. Mr. Tawatchai Cheevanon Senior Executive Vice President Group Head Global Transaction Banking Group 12. Mr. Pongsit Chaichatpornsuk Senior Executive Vice President Group Head Compliance and Legal Management Group 13. Dr. Polawat Witoolkollachit Senior Executive Vice President Group Head Technology Group 14. Mr. Kittipat Peantham First Executive Vice President Group Head Government and State Enterprise Relations Group 15. Mr. Pichit Jongsaliswang First Executive Vice President Group Head Retail Banking Product and Strategy Group 16. Mr. Chanchai Sinsuparatn First Executive Vice President Group Head Retail Shared Services Group 17. Mr. Panabhand Hankijjakul First Executive Vice President Group Head Internal Audit Group 18. Mr. Chalerm Pradidarecheep First Executive Vice President Group Head Retail Banking Sales and Distribution Group 19. Ms. Suwanna Anantanond First Executive Vice President Group Head Credit Restructuring and Asset Management Group 20. Mr. Krit Chamapisit First Executive Vice President Group Head Communication and Branding Group 21. Mr. Pativate Santavanond First Executive Vice President Krungthai Bank Top Executive Officers who retired on September 30, 2020 1. Ms. Surang Thanutthanon First Executive Vice President Group Head Credit Restructuring and Asset Management Group 2. Mr. Therdchai Wiroonpanich First Executive Vice President Group Head Retail Banking Sales and Distribution Group 3. Mr. Kosol Chamchuen First Executive Vice President Krungthai Bank 104

Details of changes of the Top Executive Officers in 2020 1) Mr. Poonpat Sripleng Vacated the position of Acting Group Head of Operation Group on March 2, 2020. 2) Mr. Santi Parivisutt Get promoted and rotated from the position of First Executive Vice President Group Head of the Internal Audit Group to be Senior Executive Vice President Group Head of the Operation Group on March 2, 2020 and served as Acting Group Head of Compliance and Legal Management Group to replace Mr. Niruj Maneepun who resigned from the position on April 22 - September 30, 2020. 3) Mr. Suppawat Wadhanapatee Get promoted from the position of First Executive Vice President Group Head to be Senior Executive Vice President Group Head of the Human Resources and Corporate Governance Group on March 2, 2020. 4) Mr. Tawatchai Cheevanon Get promoted from the position of First Executive Vice President Group Head to be Senior Executive Vice President Group Head of the Global Transaction Banking Group on March 2, 2020. 5) Mr. Panabhand Hankijjakul Took the position of First Executive Vice President Group Head of the Internal Audit Group on March 2, 2020 to replace Mr. Santi Parivisutt who rotated to take a position of Group Head of Operation Group. 6) Mr. Niruj Maneepun Senior Executive Vice President Group Head of the Compliance and Legal Management Group resigned from the Bank on April 22, 2020. 7) Mr. Pongsit Chaichatpornsuk Took the position of Senior Executive Vice President Group Head of the Compliance and Legal Management Group on October 1, 2020 to replace Mr. Niruj Maneepun who resigned. 8) Mr. Chalerm Pradidarecheep Took the position of First Executive Vice President Group Head of the Retail Banking Sales and Distribution Group on October 1, 2020 to replace Mr. Therdchai Wiroonpanich who retired. 9) Ms. Suwanna Anantanond Took the position of First Executive Vice President Group Head of the Credit Restructuring and Asset Management Group on October 1, 2020 to replace Ms. Surang Thanutthanon who retired. 10) Mr. Krit Chamapisit Took the position of First Executive Vice President Group Head of the Communication and Branding Group on October 1, 2020 to replace the vacant position. 11) Dr. Polawat Witoolkollachit Took the position of Senior Executive Vice President Group Head of the Technology Group on October 5, 2020 to replace Mr. Boonlerd Sinsombat, Senior Executive Vice President Group Head of the Technology Group who rotated to Advisor to the President and resigned from the Bank. Annual Report 2020 105

3.7 Remuneration for Top Executive Officers The Nomination and Remuneration Committee considers and presents the appropriate remuneration for top executive officers and the President to the Board of Directors for approval. The remuneration was paid according to the Performance Driven Organization Policy (PDO), that is a performance-driven organization which is based on justice and fairness. Remuneration for top executives and the President shall be associated with the Bank's performance both short and long term, and in line with the performance of each executive by emphasizing on the benefits of the executives to receive appropriate remuneration at a competitive level in the industry, reflecting on being a sustainable bank through comparison with the key performance indicators set in the balanced scorecard, including the Bank's performance against the performance of other companies that are at the same level in all dimensions. This criteria lead to long-term sustainable success under transparent guidelines and in line with the scope of job responsibilities, which reflect the relevant risks as well as the Bank's competitiveness when compare with the leading financial institutions in Thailand. In an attempt to promote good quality of life and create motivation in work, the remuneration for executives consists of monetary remuneration and other remunerations, namely the provident fund contributions from the Bank, other benefits and welfare according to the Bank's regulations as the same as of the employees. However, the remuneration for top executive offiers shall be appropriatedly adjusted continuously. In 2020, the Bank paid remuneration to Top Executives of the Bank as follows: • According to the definition by SEC, there are a total of 27 Top Executives, comprising the President, First Senior Executive Vice President, Senior Executive Vice Presidents and First Executive Vice Presidents. Their remuneration totaled to Baht 331,335,128. The Bank’s Top Executives are divided into two groups. The first group consists of 23 executives who the Bank contributes to their provident funds in the amount of Baht 280,320,402. The other group consists of 4 executives who the Bank does not contribute to their provident funds. The total remuneration of this latter group was Baht 51,014,726. (The remuneration included the special remuneration payment for 2 executives who retired in 2019 and received the special remuneration in 2020) • Remuneration of 90 Sector Heads (classified as the Management Authority according to the definition by BOT) totaled to Baht 507,813,061. They are divided into two groups. The first group consists of 79 executives who the Bank paid their salary, business unit allowance, extra gratuity, child allowance, child education allowance, housing allowance and contributed to their provident funds. The total remuneration of this group was Baht 488,500,612. The other group consists of 11 executives who the Bank paid their salary, business unit allowance, extra gratuity, child allowance, child education allowance, housing allowance but does not contribute to their provident funds. The total remuneration of this group was Baht 19,312,449. (The remuneration included the special remuneration payment for 9 executives who retired in 2019 and received the special remuneration in 2020). 106

3.8 Information of Directorship of the Bank’s Directors and Executives in Subsidiaries, Associated and Related Companies as at December 31, 2020

Related Companies Related Companies

(1) Associate Companies Subsidiaries (1) Companies companies Other (3) with joint Name (2) with joint Name Companies with joint Directors

Krungthai Companies Senior Directors (3) Executive (4) 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 1 2 3 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 1 2 Directors Directors Mr. Krisada Chinavicharana XX X X X Mr. Krisada Chinavicharana XX Mr. Krairit Euchukanonchai A XX X X Mr. Krairit Euchukanonchai A XX XX XX XX Mr. Vichai Assarasakorn X Mr. Vichai Assarasakorn X X X X X Mr. Thanwa Laohasiriwong X Mr. Thanwa Laohasiriwong X X X Prof. Dr. Kittipong Kittayarak X Prof. Dr. Kittipong Kittayarak X X X Mr. Teerapong Wongsiwawilas X Mr. Teerapong Wongsiwawilas X X General Tienchai Rubporn X General Tienchai Rubporn X Mr. Poonnis Sakuntanaga / Mr. Poonnis Sakuntanaga / / Ms. Patricia Mongkhonvanit X Ms. Patricia Mongkhonvanit X X X X Ms. Nitima Thepvanangkul X Ms. Nitima Thepvanangkul X Mr. Lavaron Sangsnit / Mr. Lavaron Sangsnit / / Mr. Payong Srivanich B XX Mr. Payong Srivanich B XX Top Executive Officers Top Executive Officers Mr. Poonpat Sripleng M XX / Mr. Poonpat Sripleng M Ms. Praralee Ratanaprasartporn M X X.C X Ms. Praralee Ratanaprasartporn M Mr. Weerapong Suppasedsak M / Mr. Weerapong Suppasedsak M Mr. Suratun Kongton M X Mr. Suratun Kongton M Mr. Rawin Boonyanusasna M X / Mr. Rawin Boonyanusasna M Mr. Ekachai Techawiriyakul M XX X Mr. Ekachai Techawiriyakul M Ms. Saranya Vejakul M / Ms. Saranya Vejakul M Mr. Santi Parivisutt M X Mr. Santi Parivisutt M Mr. Suppawat Wadhanapatee M Mr. Suppawat Wadhanapatee M Mr. Tawatchai Cheevanon M X X Mr. Tawatchai Cheevanon M XX X Mr. Pongsit Chaichutpornsuk M Mr. Pongsit Chaichutpornsuk M Dr. Polawat Witoolkollachit, M.D. M XX X Dr. Polawat Witoolkollachit, M.D. M Mr. Kittipat Peantham M Mr. Kittipat Peantham M Mr. Pichit Jongsaliswang M X X X X Mr. Pichit Jongsaliswang M Mr. Chanchai Sinsuparatn M X X Mr. Chanchai Sinsuparatn M Mr. Panabhand Hankijjakul M Mr. Panabhand Hankijjakul M Mr. Chalerm Pradidarecheep M Mr. Chalerm Pradidarecheep M Ms. Suwanna Anantanond M Ms. Suwanna Anantanond M Mr. Krit Chamapisit M Mr. Krit Chamapisit M Mr. Pativate Santavanond M X,C Mr. Pativate Santavanond M

Note: Brief information on each person's position is shown in "Brief Biography of the Board of Directors and the Executive Officers" and "Executives Directory" Symbol XX = Chairman A = Mr. Krairit Euchukanonchai B = Mr. Payong Srivanich / = Executive Director holds the following positions in Krungthai: holds the following positions in Krungthai: X = Director -Vice Chairman -President C = President -Chairman of the Board of Executive Directors -Executive Director M = Group Head -Director Notes (1) The name list of subsidiaries and associated companies are in line with the Bank's financial statement. (2) Other company refers to a company in which the Bank's shareholding is 10 percent and over excluding subsidiaries and associated companies and company in which the bank has invested due to trouble debt. (3) Company with joint directors refers to a company in which the Bank's Director has directorship of the Board of Directors. (4) Company with joint senior executive refers to a company in which the Bank's Senior Executive has directorship of the Board of Directors. Annual Report 2020 107

3.8 Information of Directorship of the Bank’s Directors and Executives in Subsidiaries, Associated and Related Companies as at December 31, 2020

Related Companies Related Companies Companies (1) Associate Companies Subsidiaries (1) Other with joint companies with joint Companies with joint Directors (3) Name Companies (2) Name Senior Directors (3) Krungthai Executive (4) 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 1 2 3 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 1 2 Directors Directors Mr. Krisada Chinavicharana XX X X X Mr. Krisada Chinavicharana XX Mr. Krairit Euchukanonchai A XX X X Mr. Krairit Euchukanonchai A XX XX XX XX Mr. Vichai Assarasakorn X Mr. Vichai Assarasakorn X X X X X Mr. Thanwa Laohasiriwong X Mr. Thanwa Laohasiriwong X X X Prof. Dr. Kittipong Kittayarak X Prof. Dr. Kittipong Kittayarak X X X Mr. Teerapong Wongsiwawilas X Mr. Teerapong Wongsiwawilas X X General Tienchai Rubporn X General Tienchai Rubporn X Mr. Poonnis Sakuntanaga / Mr. Poonnis Sakuntanaga / / Ms. Patricia Mongkhonvanit X Ms. Patricia Mongkhonvanit X X X X Ms. Nitima Thepvanangkul X Ms. Nitima Thepvanangkul X Mr. Lavaron Sangsnit / Mr. Lavaron Sangsnit / / Mr. Payong Srivanich B XX Mr. Payong Srivanich B XX Top Executive Officers Top Executive Officers Mr. Poonpat Sripleng M XX / Mr. Poonpat Sripleng M Ms. Praralee Ratanaprasartporn M X X.C X Ms. Praralee Ratanaprasartporn M Mr. Weerapong Suppasedsak M / Mr. Weerapong Suppasedsak M Mr. Suratun Kongton M X Mr. Suratun Kongton M Mr. Rawin Boonyanusasna M X / Mr. Rawin Boonyanusasna M Mr. Ekachai Techawiriyakul M XX X Mr. Ekachai Techawiriyakul M Ms. Saranya Vejakul M / Ms. Saranya Vejakul M Mr. Santi Parivisutt M X Mr. Santi Parivisutt M Mr. Suppawat Wadhanapatee M Mr. Suppawat Wadhanapatee M Mr. Tawatchai Cheevanon M X X Mr. Tawatchai Cheevanon M XX X Mr. Pongsit Chaichutpornsuk M Mr. Pongsit Chaichutpornsuk M Dr. Polawat Witoolkollachit, M.D. M XX X Dr. Polawat Witoolkollachit, M.D. M Mr. Kittipat Peantham M Mr. Kittipat Peantham M Mr. Pichit Jongsaliswang M X X X X Mr. Pichit Jongsaliswang M Mr. Chanchai Sinsuparatn M X X Mr. Chanchai Sinsuparatn M Mr. Panabhand Hankijjakul M Mr. Panabhand Hankijjakul M Mr. Chalerm Pradidarecheep M Mr. Chalerm Pradidarecheep M Ms. Suwanna Anantanond M Ms. Suwanna Anantanond M Mr. Krit Chamapisit M Mr. Krit Chamapisit M Mr. Pativate Santavanond M X,C Mr. Pativate Santavanond M

(1) Note: Brief information on each person's position is shown in "Brief Biography of the Board of Directors and the Executive Officers" and "Executives Directory" Subsidiaries 3. Krung Thai IBJ Leasing Co., Ltd. 2. Airports of Thailand Pcl. 17. PTT Pcl. 1. KTB Law Co., Ltd. 4. Krungthai Zmico Securities Co., Ltd. 3. Erawan Hotel Pcl. 18. Bangchak Corporation Pcl. Symbol XX = Chairman A = Mr. Krairit Euchukanonchai B = Mr. Payong Srivanich 2. KTB General Services and Security Co., Ltd. (formerly KT Zmico Securities Co., Ltd) 4. Advanced Info Service Pcl. 19. Elixier Foods & Beverages Co.,Ltd. / = Executive Director holds the following positions in Krungthai: holds the following positions in Krungthai: 3. Krung Thai Asset Management Pcl. 5. National ITMX Co.,Ltd. 5. Advanced Wireless Network Co.,Ltd 20. BBGI Pcl. X = Director -Vice Chairman -President 4. KTB Computer Services Co., Ltd. 6. BCI (Thailand) Co., Ltd. 6. V.Body & Paint Co., Ltd. 21. PTT International Trading Private Co., Ltd. C = President -Chairman of the Board of Executive Directors -Executive Director 5. KTB Leasing Co., Ltd. 7. V.Group Honda Cars Co., Ltd. 22. Thai Smile Airways Co.,Ltd. M = Group Head -Director 6. KTB Advisory Co., Ltd. Related Companies-Other Companies (2) 8. V.Auto Sales Co., Ltd. 23. Aeronautical Radio of Thailand Ltd. 7. Krungthai Card Pcl. 1. Suvarnabhumi Airport Hotel Co.,Ltd. 9. V.Conglomerate Co., Ltd. 24. National Digital ID Co.,Ltd. Notes (1) The name list of subsidiaries and associated companies are in line with the Bank's financial statement. 8. KTC Nano Co., Ltd. 2. Dhipaya Insurance Pcl. 10. Asian Sea Corporation Pcl. (2) Other company refers to a company in which the Bank's shareholding is 10 percent and over excluding subsidiaries and associated companies and company in 9. KTC Pico (Bangkok) Co., Ltd 3. Private Equity Trust for SME 11. Panel Plus Co., Ltd. Companies with joint Senior Executive (4) which the bank has invested due to trouble debt. 10. Infinitas by Krungthai Co., Ltd. Growing Together 1 12. Panel Plus MDF Co., Ltd. 1. Cycling Cloud Co.,Ltd. (3) Company with joint directors refers to a company in which the Bank's Director has directorship of the Board of Directors. 4. Private Equity Trust for SME 13. Shiang Heng International Co.,Ltd. 2. InnoSpace (Thailand) Co.,LTD. (4) Company with joint senior executive refers to a company in which the Bank's Senior Executive has directorship of the Board of Directors. Associate companies (1) Growing Together 2 14. TPBI Pcl. 1. Krungthai-AXA Life Insurance Pcl. 15. Relationship Republic Co., Ltd. 2. Krungthai Panich Insurance Pcl. Companies with joint Directors (3) 16. Dusit Thani Pcl. 1. BCPG Pcl. 108

3.9 Shareholding of the Board of Directors and Top Executives as at December 31, 2020

Name of Directors and Krungthai Bank Shares Held Proportion Position Top Executive Officers Own Spouse Child Total % 1. Mr. Krisada Chinavicharana Chairman of the Board of Directors - - - - - 2. Mr. Krairit Euchukanonchai Vice Chairman - - - - - 3. Mr. Vichai Assarasakorn Director - - - - - 4. Mr. Thanwa Laohasiriwong Director - - - - - 5. Professor Dr. Kittipong Kittayarak Director - - - - - 6. Mr. Teerapong Wongsiwawilas Director - - - - - 7. Gen. Tienchai Rubporn Director - - - - - 8. Mr. Poonnis Sakuntanaga Director - - - - - 9. Ms. Patricia Mongkhonvanit Director - - - - - 10. Ms. Nitima Thepvanangkul Director - - - - - 11. Mr. Lavaron Sangsnit Director - - - - - 12. Mr. Payong Srivanich President - - - - - 13. Mr. Poonpat Sripleng Senior Executive Vice President - - - - - 14. Ms. Saranya Vejakul Senior Executive Vice President - - - - - 15. Ms. Praralee RatanaprasartpornSenior Executive Vice President - - - - - 16. Mr. Werapong Suppasedsak Senior Executive Vice President - - - - - 17. Mr. Suratun Kongton Senior Executive Vice President - - - - - 18. Mr. Rawin Boonyanusasna Senior Executive Vice President - - - - - 19. Mr. Ekachai Techawiriyakul Senior Executive Vice President - - - - - 20. Mr. Tawatchai Cheevanon Senior Executive Vice President - - - - - 21. Mr. Santi Parivisutt Senior Executive Vice President - 1,070 - 1,070 0.000008 22. Mr. Suppawat Wadhanapatee Senior Executive Vice President - - - - - 23. Mr. Pongsit Chaichatpornsuk Senior Executive Vice President - - - - - 24. Dr. Polawat Witoolkollachit Senior Executive Vice President - - - - - 25. Mr. Kittipat Peantham First Executive Vice President - - - - - 26. Mr. Pativate Santavanond First Executive Vice President 4,000 - - 4,000 0.000029 27. Mr. Pichit Jongsaliswang First Executive Vice President - - - - - 28. Mr. Chanchai Sinsuparatn First Executive Vice President - - - - - 29. Mr. Panabhand Hankijjakul First Executive Vice President - - - - - 30. Mr. Chalerm Pradidarecheep First Executive Vice President 12,600 2,591 - 15,191 0.000109 31. Mr. Krit Chamapisit First Executive Vice President - - - - - 32. Ms. Suwanna Anantanond First Executive Vice President - - - - - Annual Report 2020 109

3.10 The Bank’s Personnel 3.10.1 Number of Employees The number of regular employees and employee under the signed contract and staff members divided by Group as at December 31, 2020 are as follows: Unit: Person

Number of Regular Employees and Staff Group Employees under the Signed Contract Total Members Head Office Non Head Office Primary Group Wholesale Banking Group 345 14 - 359 - Executives, employees and business unit being directly to the Wholesale Banking Group 19 - - 19 - Corporate Baning 1 Group 184 - - 184 - Corporate Banking 2 Group 142 14 - 156 Retail Banking Sales and Distribution Group 2,856 9,074 71 12,001 Business Center Group 1,124 - 2 1,126 Global Markets Group 112 - - 112 Government and State Enterprise Relations Group 221 - - 221 Credit Restructuring and Asset Management Group 186 - - 186 Total 4,844 9,088 73 14,005 Non-Primary Group Digital Solutions Group 193 - - 193 Global Business Development and Strategy Group 74 - - 74 Technology Group 974 - - 974 Retail Strategy Product and Segmentation Group 464 - 22 486 Compliance and Legal Management Group 210 - - 210 Internal Audit Group 300 - - 300 Human Resources and Corporate Governance Group 316 - 1 317 Financial Management Group 361 - - 361 Risk Management Group 314 - 2 316 Retail Shared Services Group 1,824 - 50 1,874 Global Transaction Banking Group 262 - - 262 Operation Group 677 - 4 681 Communication and Branding Group 146 - - 146 Business unit being directly to the President 63 - - 63 Total 6,178 - 79 6,257 Grand Total 11,022 9,088 152 20,262 The relationship between the executives and the representatives of the employee The Bank held a meeting between the executives and the representatives of the employee to jointly consider and give opinions on improving the Bank's operational efficiency as well as promoting and improving labor relations without causing any labor dispute. The Bank has established a working group responsible for improving the quality of life of employees. The group is required to call a meeting regularly to discuss about various suggestions that are appropriate and generate utmost benefits to the Bank and employees concurrently. Besides, the employee welfare satisfaction surveys were conducted to acknowledge levels of satisfaction among various factors in order to seek for solutions and improvements to develop a better quality of life for employees. As a result, it leads to good relationship and achievment in the organization goals together. 110

A meeting between the executives and the representatives of the employee has taken into account the Bank's benefit significantly. Representatives from both sides jointly discussed, solved the problems, drew conclusions, provided measures to fix all issues in accordance with the legal framework applicable to the Bank, adhered to justice and fairness and did not discriminate in terms of race, religion, gender and associates. In this regard, it results in no conflict between the executives and the representatives of the employee, and no impact on the Bank's business operations. 3.10.2 Compensations for Employees The compensations given to the employees (including Top Executives) in 2020 are divided into salary, wage, bonus, provident fund contribution, medical expense, social security contributions, training courses expense, pension and other benefits in total amount of Baht 22,993 million. 3.10.3 Policy on Human Resources Training and Development in 2020 Amid many challenges from technological advancement and intense competition raised by both domestic or international banks and non-bank business, including business disruption, the Bank has put importance on developing its employees based on their core competency, technical competency and management competency. The Bank has analyzed and specified development areas in order to arrange the human resource development plan to close their competency gaps with the intention to achieve the goal of being a digital bank that performs recognition on moral and ethical practices to employees through operations in line with rules and regulations from the regulators. the training courses such as “Lesson Learn for Sustainable Accordingly, Krungthai Academy Department, as the main Krungthai” course - online learning course for all levels of department responsible for personnel and leadership employees, “Market Conduct” course - giving employees development, has considered relevant factors in order to organize knowledge on providing services to customers and financial appropriate the training courses. Through gathering information service users fairly according to their basic rights. Lastly, the about the training needs from the Bank’s executives and staffs, “Design Thinking of Credit Process for Productivity - Efficiency” the Bank’s strategy, the Top Executives’ policies, Groups’ policies, course, the objective was to enable employees to gather and including the staff’s demand, the department also took into brainstorm in order to seek for actual problems and then try to consideration the competency framework, the Bank’s strategic close the gap from important discoveries, improving the credit challenges, operation plans both short term and long term, in process for productivity and efficiency, preventing corruption an attempt to determine the human resource development plans and damage to the Bank, enhancing the creation of corporate covering all necessary dimensions for the Bank’s business culture for good corporate governance and Zero Tolerance operation. At present, the training aimed to improve employees’ as well as building a public trust. skills to accommodate the business operation amid intensive Apart from knowledge and understanding regarding competition. However, the upskill and reskill trainings with morality and ethics, the Bank placed great emphasis on innovative skills have been provided to specific employees so development of knowledge and basic skills necessary for work that they can perform their jobs successfully in case they have in an attempt to accommodate the upcoming changes. In to rotate the job functions. With the purpose to enhance employess particular, the Bank prepared employees with knowledge related skills to work with effectiveness, efficiency and sustainability, the to the Thai Financial Reporting Standards 9: TFRS9, which was Bank in 2020 has provided training that emphasized in 4 aspects enforced in Thailand since 1 January 2020 and affected the as follows: operations of the Bank, through the “Introduction to Thai Financial Reporting Standards 9 (TFRS 9)” course and the “TFRS 9: Financial • Strengthen Foundation Instruments - Hedge Accounting” course. The aforementioned Regarding the strategic objectives aimed at gearing up courses were embedded with content focusing on the principles the Bank to become a learning organization with virtue as well as and regulatory guidelines as well as financial and banking business supporting the cultivation of a zero-tolerance culture, the Bank analysis through financial statements, hedge accounting and has taken action to determine the desirable behaviors according accounting reconciliation for accuracy verification. Regarding to the 5 moral identities. Furthermore, the Bank also boosted up the Personal Data Protection Act, B.E. 2562 (2019), the Bank has Annual Report 2020 111

• Upskill - Reskill With the purpose to develop knowledge and skills of employees to work efficiently and drive the organization successfully to achieve better performance toward becoming digital banking, the Bank has defined the skills necessary for human resources development in line with the Bank's policy in 5 areas as follows: o Future Banking: To prepare employees to understand and utilize new information and technology effectively for digital banking, the Bank set up the National Digital ID course and also created media publication regarding digital knowledge i.e., blockchain, AI, digital supply chain financing and human- centered design, for employees across the Bank. In terms of enhancing knowledge and updating the digital trend for potential employees and employees in the Speedboat business model, the Bank has organized digital short courses, both in form of classroom training and e-Learning approach, so that they can take only short time to study and are capable of applying the acquired skills with their work immediately. Examples of such short courses are "Digital Enablement Program'' course and "Artificial Intelligence: Strategies for Leading Business Transformation" course. The Bank also employed the SkillLane (TUXSA), which is an e-Learning platform jointly developed with Thammasat University, that enabled the employees to arrage self-study schedule and select preferable contents covering data analytics, digital business transformation, digital technology management, strategic planning, management and administration, as well as specialized skills in business operations organized a training course on the topic of “Personal Data and leadership. This also included Your Next U platform, which Protection Act, B.E. 2562: PDPA” which was an online learning focused on building employee skills in various fields, increasing course for employees at all levels across the Bank. Moreover, their knowledge and equipping them with readiness toward the Bank also encouraged executives to realize their roles in changes in the digital age. overseeing employee’s discipline through the "Discipline o Retail: To enhance knowledge regarding products, Recognition, Risk Reduction and Non-compliance Prevention" marketing and sales in accordance with digital banking, the training course to strengthen the Three Lines of Defense model. Bank arranged “Professional Mutual Fund Sales: Superstar Module” • Leadership course, “KTB Financial Planner” course, “Customer Relationship The Bank endeavored to develop executives’ skills in Management for HUB” course, “ICR5Plus PRO” course and “Digital creating inspiration and fostering a coaching culture, which is Marketing” course for employees. a key factor in enhancing employee engagement and o Credit & Core Business: To prepare employees readiness performance, through internal and external training for executives in terms of customer experience management for superior service of the Bank specifically. Examples of such courses were the and build up effective engagement in the digital age, the Bank “Storytelling” course, “Essential Coaching Tools for Leader” course organized “Pre & Post Sale Knowledge (Credit Analysis)” course, and “Effective Coaching for Leader” course. “Financial Accounting for Lenders (FAL)” course, “Unreliable In addition, due to the COVID-19 outbreak, the Bank Financial Statement Issues in Thailand & Financial Data Validation” has shifted the working styles of employees across the Bank to course, “Risk-based Lending Workshop” course and “RM X2G2X be flexible working (Flexi-Working), with some employees working Foundation Program”. from home. Therefore, the executives of the Bank had to adjust o Cyber Security & Privacy: To prepare for digital banking their management methods and monitor the performance of and accommodate for the continuous increasing rate of numerous their teams closely in an attempt to continue building engagement digital banking transactions, including the large amount of data, among the teams, as well as driving the teams to work more the Bank organized courses on cyber security and data privacy efficiently even when not working in the same place. The Bank for relevant employees such as "Knowledge of Information Security then prepared a manual for operating performance management Management System (ISMS) under ISO/IEC27001: 2013" course, under flexible working context, including organizing the "Effective "Information Security Awareness" course, "CompTIA Security + Team Management for Flexi - Working Environment" course for Online" course, "Personal Data Protection Act for Human Resources executives and employees. Management (PDPA for HR)" course and "Personal Data Protection Act for Internal Audit (PDPA for Internal Audit)" course. 112

o Data - Driven Organization: The Bank developed Meanwhile, during the COVID-19 pandemic, it resulted in rapidly its employees from various Groups to become data scientists with changing in terms of training approach for the employees. From information technology skills and data analytics skills, which were previously focusing on classroom training, the majority trainings in line with the data-driven policy for driving the organization. have been converting to e-Learning or online learning The objective was to develop employees so they were able to substantially; therefore, the digital skills of employees based on utilize existing banking information to generate benefit strategies the Bank's policy have been enhanced as well. Likewise, to be and performed decision-making in issues related to the Bank's in line with measures to prevent the spread of COVID-19, especially business operations properly. the social distancing principles, the Bank has offered e-Learning courses or online learning courses in the proportion of 50% of all • Digital Banking courses organized in 2020 correspondingly. The Bank determined to boost up the skills that are Additionally, the Bank also took into account social and necessary for digital banking, particularly through the environmental issues as well as specified vision and mission relating development of digital mindset, digital literacy skill and essential to the economic, social and environmental development in a digital skills necessary for the work and the creation of new sustainable manner. Executives and employees participated in innovations for the organization. To satisfy the needs of various the social and environmental activities that the Bank held groups of customers in the digital age, including those in 5 continuously. In 2019, the Bank initiated means to distribute the Ecosystems, as well as to operate business amidst the changing environmental knowledge to employees through Krungthai Loves trend, the Bank has provided knowledge on Agile Way of Working Communities Project, which provided an opportunity for together with Design Thinking method for employees so that they participants to attend the environmental lectures and activities are able to apply such skills in actual oepration. Moreover, in order to recognize the value of different environments i.e., the Bank has organized the Krungthai Hackathon program that mangrove forest and coral reef. In this project, 2,256 participants provides the opportunity for interested employees to apply planted mangrove forest and coral in Klongkone District and through the open application process. During the program, Dongtan Beach in Sattahip District. However, due to the COVID-19 the participants will get the consultation by national mentors outbreak in 2020, the Bank has organized the "DIY Muslin-Cotton continually. The selected prototypes will be considered for further Mask" course in order to teach employees on how to make fabric development as the Bank's product or service. This program will face masks so they got the muslin-cotton mask made by stimulate and inspire for innovation in the organization. themselves from the materials that the Bank prepared. There Regarding the digital literacy, the Bank has organized were 5 batches of the course with a total of 90 participants courses and created media to broadcast digital knowledge for whereas there was a video recording of the course launched employees at all levels, both in Carrier and Speedboat business for the Bank’s employees to follow the instruction themselves. In model. The key objective is to strengthen employees’ basic digital the meantime, the Bank had delivered fabric face masks to foundation so that they can operate their duties in accordance communities, which was considered as the optional ways for with the Bank's digital banking strategy. In particular, the Bank preventing infected risks in the communities and for safety of provided a “National Digital ID” course and communicated the Bank’s employees, reducing the shortage of medical masks fundamental digital knowledge through the Digital Sharing project. as well as decreasing the use of natural resources and waste Moreover, the Bank instilled cyber security awareness among arising from the use of disposable paper masks. employees, which will encourage the secure operation/use of To ensure safety and health of all employees, the Bank technology, including preventing risks that may arise from the provided several training courses related to physical health, collection, use and disclosure of information. The aforementioned occupational health and work environment accordingly. courses are “Phishing Mail” course - procedures for dealing with For instance, the Bank organized the “Occupational Safety, cyber threats that come in the form of phishing mail, “Ransomware Health and Environment Committee” course, “Safety Officer for 2020” course and “Personal Data Protection Act B.E. 2562: PDPA Supervisor Level and Management Level” course and “Basic Fire via Google Form”. In addition, there were courses to develop Fighting” course for 7 batches, totalling to 231 participants. employees in the Carrier business model to increase more value Besides, the Bank also had a policy of developing its employees to the existing business or to seek new business opportunities to be the content creators so that they could create and develop such as “Preparation for CRM Positions” course (extending the learning materials for e-Learning courses of the Bank and publish value chain) as well as other courses that promote synergy for internal employees to study, such as “Understand G-Suite in between Carrier and Speedboat model such as “RM X2G2X 3 Minutes” course, “Micro Learning: Economic Direction, Banking Foundation Program”. Direction and Working in The New Normal Era.” Human Resources development policy of the Bank to In conclusion, the Bank in 2020 has managed the internal support the digital banking in the future put emphasis on and external trainings, both domestically and internationally stimulating employee to exhibit self-development skills. In this through multiple learning channels for 777 courses, 1,179 batches regard, the Bank provides learing opportunity through Knowledge and there was a total of 21,152 employees who passed the Management (KM) and e-Learning channels to foster a culture trainings with training duration calculated as 109.81 hours per of self-learning and lifelong learning, which enables employees person per year. to study and learn new things at anytime and anywhere. Annual Report 2020 113

Report of the Board of Executive Directors The Board of Executive Directors is set up by the Board of Directors with the intention of providing support to the operation of the Board of Directors. At present, the Board of Executive Directors consists of 4 members from the Board of Directors and the President serves as an ex officio Executive Director. The members of the Board of Executive Directors are as follows: 1. Mr. Krairit Euchukanonchai Chairman of the Board of Executive Directors 2. Mr. Poonnis Sakuntanaga Executive Director 3. Mr. Lavaron Sangsnit Executive Director 4. Mr. Payong Srivanich Executive Director Ms. Sineenard Damri-anant Assistant to Secretary In 2020, the Board of Executive Directors held a total of 46 meetings to perform duties in accordance with the scopes and responsibilities defined in the Charter of the Board of Executive Directors and reported the operating performance to the Board of Directors on a regular basis. The significant highlights are summarized as follows:

Scrutinize and Approve Credit/Debt Restructuring The Board of Executive Directors performed duties in corresponding to the Bank’s strategy as follows: (1) to approve 254 credit cases and review before proposing to the Board of Directors for approval for 212 cases (2) to approve 26 cases of debt restructuring and review before proposing to the Board of Directors for approval for 5 cases (3) to grant approval for 8 policy-related issues and review before proposing to the Board of Directors for approval for 59 issues (4) to acknowledge a total of 113 reports e.g., annual report of the Bank’s affiliates, progress report and follow-up result in relation to the resolution of the Board’s meetings and report on investment in debt and equity instruments, etc.

Consider Strategic Plan/Business Plan The Board of Executive Directors put emphasis on scrutinizing strategic plan/annual business plan, policy and strategic plan for companies within its financial conglomerate, which constitute business alliance between the Bank and its affiliates to ensure strategic alignment and mutual goal in promoting growth and wealth of the conglomerate. The Board of Executive Directors also reviewed capital management plan and capital management strategy of the Bank before proposing to the Board of Directors for approval.

Monitor the Operating Performance of the Bank and its Affiliates The Board of Executive Directors monitored the Bank’s operating performance and measured it against key performance indicators and peer banks as well as monitored the investment in equity and debt instrument. The Board of Executive Directors also put importance on ensuring that the Management adopted and implemented the meeting resolutions together with closely and regularly monitored the operating performance of the Bank’s affiliates.

Delegate Policies and Provide Suggestions to the Management The Board of Executive Directors delegated policies and provided constructive suggestions to the Management in addition to stress importance on the proactive performance so that the organization achieved its strategic objectives. Elaborated examples are as follows:

Credit Policy • Analyzed the problems relating to Non-Performing Loans (NPLs), revised credit approval strategy and sought for methods to solve NPL problems by focusing on the effectiveness of debt collection and measures to prevent NPLs. Furthermore, the credit process improvement had been manipulated to be more concise. • During the COVID-19 pandemic, which has slowed down the overall economy of the country, affecting business operations and customers work, the Bank stipulated policy to support, supervise and assist debtors with the intention to ease their impact as well as to help them get through this tough crisis. However, in the meantime, the Bank has confronted with high risk from economic slowdown and the impact from various problems that happened as well. Therefore, the careful credit consideration was required and the necessary reasons must be clearly identified whereas the reasonable assessment should be conducted by concerning the actual needs and the severity of the impact that each customer received. Additionally, the Bank also needed to monitor the circumstances of the debtor from time to time in order to acknowledge about the debtor’s condition closely. • Relating to the policy on business risk consideration, in principle, when determining credit support for all types of Credit Facility, whether the high-risk or low-risk credit, the customer risk must be taken into account as a basis. The credit risk rating must be set in an attempt to clearly detect the status of the customer so that the conditions of the credit limit can be aligned with the risks of such customer properly. Although credit rating was a very important tool, it must be performed with quality. The Committee gave policy for Risk Management Group to integrate the Credit Risk Rating Model (CRRM) system to be able to categorize the credit rating into Obligor Risk Rating and Facility Risk Rating in order that it can reflect the actual risks of customers. • Developed the Industry Direction Report or classification of industries by risk level as a guideline for managing the credit portfolio by industry. A stress test was in place to assess the impact on credit portfolio and capital adequacy. Monitored and reported of risk management results to control credit risks in accordance with the risk management plan. • Delivered a policy to control Exposure Limit with Single Lending Limit (SLL). The credit staff (RM), who was in charge of the customer, must recognize the overview of the Total Exposure. In particular, the RM should estimate amount of the Bank’s exposure to each customer in terms of Indirect Exposure from the bonds/debentures issued by the said customer as collateral for the Bank 114

in addition to providing direct exposure credit aimed at the benefit of risk management of customer as a whole. Therefore, when RM knew the total exposure of each customer, the Exposure Limit should be controlled with Single Lending Limit (SLL), even if the criteria did not count Indirect Exposure as part of SLL. For the benefit of the Bank’s risk control, the Committee gave a policy to the Risk Management Group to establish regulations for the cases where the Management was required to provide the exposure of any customer beyond the designated SLL (include Indirect Exposure). • In the process of risk management, the risks were required to be identified, measured, controlled, monitored and managed appropriately. Operations must be supervised in accordance with credit principles by utilizing knowledge, competence and professional discretion. There were guidelines for risk control while being cautiously aware of high-risk loans in order to prevent any damage to the Bank. • Delegated a policy for the Risk Management Group to set up guidelines for controlling risks on foreign credit transactions that must be undertaken by Match Buyer to control the drawdown of credit lines in accordance with the credit objectives. On the other hand, if there was a need to do Match Amount to be competitive with the market, more prudent risk control and conditions must be performed and established respectively through mapping overseas funds with the buyer’s name stated in the transaction documents to support the credit drawdown every time. • The quality of trade accounts receivable and product stock must be regularly checked and strictly complied with the Bank’s regulations. This was to reduce risks and prevent damage from the loss of stock pledged as collateral or the mismatch of actual inventory and the stock report. The Bank defined the integrated solutions to problems through the implementation of technology. With the purpose to facilitate the credit operation process for better performance, the Bank developed the banking system for the stock inspection by a surveyor or a bank employee. Thus, it resulted in the decrease of the Bank’s overall expenses. Nevertheless, when considering to select technology to use as tool to support the work, the thoroughly assessment must be conducted by taking into account the benefits that the Bank shall receive along with the expense and cost analysis. • Presently, deposit interest rates are very low and tending to decline continuously. Besides, some countries have adopted a Negative Interest Rate so the relevant management departments must consider carefully. To be precise, the reference interest rate must not be set as Fixed Deposit Rate (FDR) for new credit line approval. • Attributable to the implementation of the TFRS 9 standard, effective on 1 January 2020, it has affected on the Bank’s reserve provision, resulting in faster reserve recognition based on the change in debtor status and the financial statements reflecting the actual position in a timely manner. Consequently, the appropriate portfolio management has been required while the review the credit limits of all customers must be conducted so that the implementation of TFRS 9 standards did not affect the Bank’s reserve. This eventually relieved the burden on reserve provision and the performance of the Bank got improved. • Encouraged for the information study and understanding on the character and business nature of each customer group so as to noticeably verify the customer’s wealth information and their corporate governance. Accordingly, the Bank shall be able to set appropriate guidelines for customer management. Under the careful consideration, such management guidelines must be in line with the risks level of each customer while the credit limit shall be reliable with customer demand. Thus, the Bank shall monitor closely and perform strict supervision in terms of credit limit to avoid misuse. Nevertheless, the regular assessment on the quality and potential of customers shall be conducted at appropriate intervals. Before conducting any action, the Bank’s business opportunities must be taken into consideration carefully and thoroughly. The factual information and debtor’s background were required to be checked deliberately and meticulously with the purpose to prevent the Bank from losing further business opportunities or benefit. As a result, the Bank shall be able to expand business, generate income and acquire public trust and positive image through the appropriate operating process that focuses on the utmost benefit of the Bank primarily. • Regarding the improvement the Bank’s various contract forms, format of the contract forms was reviewed to be appropriate and the content were amended by carefully considering the aspect of law prudently and prescribing in the suitable wordings. However, the contract forms still conformed to the standard form and corresponded to customers in each group, causing no problems in signing contracts with customers. • Required the important documents to be signed by authorized signatory. Documents and/or reports of information that customers submit to the Bank, which contain essential information designed for the credit consideration, such documents have to be signed by an authorized director of the customer. Hence, the Bank shall take legal action against the report of false information that may cause damage to the Bank. Innovation and Digitalization Policy • The Bank has a clear strategic plan and strategy to drive the organization into digital banking by means of applying modern systems and technologies to improve operative works in all dimensions. It is necessary to leverage the Bank’s operations from the starting point to the finishing line along the entire process to be more efficient. Through adopting the digital and robotic process automation (RPA) system to help increase the competence of the Bank’s work across the organization, from the First Line of Defense, Second Line of Defense and Third Line of Defense, this enabled the work process to be faster, accurate, spending less cost and reducing redundancy as well as errors in operations. Explicitly, it encouraged more precise and effective monitoring of the operations. • The Bank has been preparing to step into the Digital Economy by continuously developing the platforms that satisfy all requirements of financial services and prospective strategies. At present, the Bank has been running the business simultaneously under the parallel strategy or 2 Banking Models – Carrier and Speedboat. The former term referred to the operation in the traditional banking business such as monitoring the credit quality, accelerating work processes by applying technology to the services and focusing on expanding the business from customers of business partners in all sectors. Meanwhile, the Speedboat model, as a new business model, paves the way for the Bank to establish Infinitas by Krungthai Co., Ltd. (Infinitas by Krungthai) – the gathering of people with expertise in research, development and service providing in terms of innovation and digital solutions. Apart from responding to the Speedboat strategy and escorting the Bank to be the leader in Digital Platform via operating technological businesses specifically, the company aimed to create new national platforms and to strengthen the Bank’s customer base. In this Annual Report 2020 115

regard, the Infinitas is truly the Speedboat that is looking for new business opportunities as well as exploiting resilient and agile functionality in flexible operation context. Through focusing to initiate innovation that connects the Bank’s 5 ecosystems, the company shall build on the success of a large number of databases and use them for processing in order to understand customer needs at the exact point, reducing operating costs and generating sustainable income for the Bank. All of these shall enable the Bank to break through the Perfect Storm arisen from economy with effectiveness and accomplish all the missions set. • By adopting advance technology and information technology systems as the main engine in driving businesses, it was necessary to prepared for the risks from cyber threats. There must be a strong and secure security against cyber threats, which is ready to deal with any situation. In addition, the Bank should specify the regulatory framework and risk management in terms of people, processes and tools to reduce the impact on customers and the Bank’s reputation. • Put emphasis on business operation that focuses on integrated electronic banking. In particular, applied modern, complex and diverse technology to manage information technology infrastructure as well as developing more financial products and services. • Supported and promoted the development of application platforms and web applications that were cooperating to help the nation and implement government policies in execution of various projects to accommodate for the COVID-19 epidemic. • Each Blockchain Infrastructure investment must be carefully considered in all dimensions so as not to be the investment in infrastructure that was redundant with the existing infrastructure in which the Bank had already invested. This shall be advantageous for other products as well as the ability to communicate with the international Blockchain system of foreign countries. • Ensured to develop competencies of Bank’s staffs, especially in technology literacy, through the upskill/ reskill trainings. For sustainable growth of the Bank, this is projected that the Bank can effectively compete in an age of disruption driven by digital technology and emerging business models. Organization Management Policy • For the efficiency and effectiveness in working together in the organization, the important mission was that all parties must cooperate and collaborate in a holistic manner that covered all issues, including the law and understanding of the Bank’s and customers’ businesses in order to generate utmost benefit. In this regard, the lessons-learned from previous cases had been conducted to effectively develop knowledge skills. By taking the pattern/features of the damage case or defects arising from work operations into a lesson, the relevant parties, such as those who detected or revised in that case, shall become the key speakers in elaborating such lesson to executives. Subsequently, through broadcasting the video from lessons-learned presentation, all employees throughout the Bank can study, understand, and develop their skills correspondingly. Therefore, this will be a truly effective and efficient operation for Lessons-Learned approach. • Delivered policy regarding the Zero Tolerance Towards Non-Compliance and Fraud to support Market Conduct operation that placed importance on elevating the standard in financial services. Furthermore, in order to become the prototypical Moral Bank under the Krungthai Moral initiative, the Bank has continually cultivated employees’ awareness to jointly created Zero Tolerance culture within the organization and encouraged them to perform duty with accuracy. Accordingly, the Bank had formulated the monitoring method and worked together in seeking for anti-corruption or non-compliance prevention schemes in addition to support the effective operation under Three Lines of Defenses.

Mr. Krairit Euchukanonchai) Chairman of the Board of Executive Directors 116

Report of the Compliance Committee The Compliance Committee of Krungthai Bank PCL consists of four (4) qualified Independent Directors. The Group Head of Compliance and Legal Management Group and the Sector Head of Compliance and Procedures Sector serves as Secretary and Assistant Secretary of the Compliance Committee respectively. The Compliance Committee performs its duty within the scope of work and responsibility as prescribed in the Charter of the Compliance Committee approved by the Board of Directors, which is in accordance with the requirements of the Stock Exchange of Thailand and regulation of Ministry of Finance. In 2020, the Compliance Committee held 12 meetings in total and submitted the minutes of the meeting to the Board of Directors quarterly. The significant performances are summarized as follows: 1. Consider the Annual Compliance Report 2019 and the Corporate Governance Report 2019 The Committee considered and approved the Annual Compliance Report 2019 before submitting to the Bank of Thailand, together with providing suggestions to elevate the cooperate governance for further effectiveness in the following year. In this regard, all actions the Bank have performed within the framework of the Compliance Risk Management Plan are required to be reported accurately, appropriately and easily to understand, including presenting the strengths of the Bank. 2. Consider the Performance Appraisal of the Compliance Unit in 2019 The Committee considered the performance appraisal of Compliance Unit to comply with the guidelines of the Bank of Thailand RE: The Compliance of Financial Institutions (Compliance). The scope of consideration was not limited to only the action base but also on the result base. In addition, the Compliance Unit shall utilize the evaluation results to preform room for improvement as well as carrying out relevant actions to be more efficient. 3. Consider the Plan, Review and Monitor the Implementation of Compliance Program 2020 The Committee considered improving and providing guidelines for the analysis and the association of data/information to determine the risk level according to the Risk Matrix scheme. The Compliance Program 2020 has been conducted by mainly taking into account the level of compliance risk. By considering the views and opinions from the practitioners (1st Line of Defense) and from the internal audit departments of the Bank (3rd Line of Defense), the Compliance Program should emphasize on preventive risk management while trying to stimulate and create a process for the 1st Line of Defense to realize and focus on performing their responsibilities in accordance with the rules and regulation. Furthermore, the Program should also enhance the oversight of overseas branches. Nevertheless, the Committee has closely monitored the execution of the Compliance Program 2020 through considering the performance reports resulting from the recommendation on process improvement that reflects compliance risk management. Consequently, this is aimed to create the compliance culture that focuses on Market Conduct according to the guidelines of the Bank of Thailand. 4. Consider to Increase the Efficiency of the Bank’s Board of Directors Meeting The Committee considered the administration of meeting agenda proposed to the Board of Directors for further efficiency and appropriateness. In details, a checklist of important details has been prepared whereas the presentation approach has been changed to be clear under the appropriated grouping of related policies. The Committee also assembled trivial agendas into one agenda as well as prioritizing and setting timeframe for presenting such agenda in the meeting properly. Besides, the authorized purchasing limit of the Board of Directors was also adjusted. For the discussion on the Bank’s strategies to support digital transformation and the effective organization management, the Committee agreed to increase duration for the Board of Directors’ meetings correspondingly. 5. Review the Compliance Policy, the Compliance Unit Charter and the Compliance Committee Charter The Committee considered the appropriateness of content in the Policies and the Charters to be consistent with the Bank of Thailand (BOT) guidelines and current organization structure of the Bank. With the purpose to be consistent with the current situation and support the emergencies that may arise in the future, content and wording regarding the topic of electronic meetings in the Charters was amended and added to be clear along with conforming with the policies of the Bank. 6. Review the Anti-Money Laundering Policy and Counter-Terrorism and Proliferation of Weapon of Mass Destruction Financing Policy (AML/CTPF) for 2020 The Committee considered the appropriateness of the amendment in terms of wording so as to comply with the law, cover and correspond with the Counter-Terrorism and Proliferation of Weapon of Mass Destruction Financing Act B.E. 2559 (2016). However, the details relating to topics of identification and verification of customers as well as the correlated matters for employees’ training have been adjust to be in line with the Ministerial Regulation on Customer Due Diligence B.E. 2563 (2020), the BOT Notification Re: Regulations on Know Your Customer (KYC), and Rules and Procedures for Training Provision under the Anti-Money Laundering Board Ordinance on the Provision of Training to the Reporting Entities under Section 13 and Section 16, B.E. 2563 (2020) respectively. 7. Review the Anti-Bribery and Corruption Policy The Committee considered the appropriateness of the policy in accordance with the Organic Act on Anti-Corruption B.E. 2561 (2018) and the NCC announcement RE: Guidelines on Appropriate Internal Control Measures for Juristic Persons to Prevent Bribery of State Officials, Foreign Public Officials and Agents of Public International Organizations, including Memorandum of Understanding (MOU), namely the MOU on the Banking Industry Code of Conduct with commercial banks, the MOU on the Cooperation in National Anti-Corruption Strategy Driving Phase 3 (2017-2021), the MOU on driving the Bank to become a model of moral organization and the Collective Action Coalition Against Corruption (CAC) Project in which the Bank has joined as a member. 8. Review and Monitor the Report of Key Risk Indicator and Compliance Risk Dashboard The Committee continuously reviewed the report and monitored key risk indicator and compliance risk dashboard to acknowledge changes of KRI, the risk assessment towards the regulatory compliance from the critical transaction/regulation and the key risk issues that may arise to the Bank. The Committee also provided suggestions toward the establishment of plans for the prevention or mitigation of risks as well as the dashboard preparation that should be easy to understand and benefits to the Bank. Annual Report 2020 117

9. Review and Monitor the Progress of Market Conduct for Three Lines of Defense The Committee has recognized and attached great importance to the compliance with the Market Conduct by reviewing and monitoring regularly on the progress of cooperation between the Bank’s 3 Lines of Defense in terms of Market Conduct in order to improve the Market Conduct rating. The Committee also provided suggestion to generate motivation or to organize activities that properly communicate to employees. In this regard, the Committee has continued to push Market Conduct as part in creating clear and concrete policies or guidelines as well as cultivating Market Conduct in operations and organizational culture (Tone from the Top). 10. Review and Monitor the Compliance Report of the Bank’s Overseas Branches The Committee reviewed and monitored the compliance report of eight (8) overseas branches and one (1) overseas representative office on a quarterly basis. The objective was to acknowledge the important changes regarding the regulation and to prevent the occurrence of non-compliance with Thai and foreign regulations or illegal issues or in the case of being fined by any authorized agency. The Committee also took into account the direction of foreign branch supervision for special or urgent consideration in order to elevate the compliance ground and generating utmost effectiveness. 11. Review and Monitor the Summary Report of the Internal Audit Department The Committee regularly reviewed the report and monitored the findings of the Internal Audit Group on a quarterly basis. In this regard, the relevant suggestions have been provided to resolve the misconduct found in order to prevent from repetitive offenses committing and reduce damages that may happen to the Bank. 12. Monitor Compliance-Related Issues The Committee has monitored compliance-related issues in order to provide recommendations towards the operations that have been corresponding to the regulations of the Bank of Thailand and other external regulators, for example Supervision of Financial Business Groups 2019, Anti-Corruption Guideline, Banking Industry Code of Conduct Guideline and Rules of the Acceptance of Property or Other Benefits of State Officials B.E. 2663 (2020). The Committee also observed the royal decrees and decrees that have been recently issued to solve various problems occurring in the Coronavirus Disease 2019 (COVID-19) pandemic. 13. Follow Up the Preparation for Supporting the Personal Data Protection Act, B.E. 2562 (2019) The Committee followed up the preparation and provided suggestions to support the Bank operations in conforming to the requirements of the Personal Data Protection Act, B.E. 2562 (2019), which will take effect on 1st June 2021. In particular, the Act shall have impact on the Bank, the Bank’s customers and counterparties in different ways. 14. Give Policy, Supervise and Monitor the Implementation of the Krungthai Compliance Champion Project, which is a Pillar of Krungthai Moral Initiative The committee gave the policy towards the execution of the Krungthai Compliance Champion Project through supervising, encouraging, giving suggestions and following up the project operation that promoted awareness and collaboration from employees of all sectors. With the purpose to shape their mindset as well as enthusiastically developing and improving the work processes; therefore, the inside-out blasting approach has been used through design thinking and hackathon during the project. As a result, the Bank achieved the prototype concept in terms of supervision on Market Conduct that can meet the requirements and solve the precise problems. This considered as the Bank’s policy to create new tools that would facilitate for easier work. Moreover, the Committee also suggested the to publicize the project to both inside and outside the Bank in order to create employee commitment, encourage their participation as well as acquiring the public trust from general public. 15. Give the Policy and Suggestions to the Management The Committee gave advantageous suggestions to the Management regarding the process improvement of the compliance departments/units in an attempt to elevate greater efficiency and prudence as follows: 15.1 The Committee has attached importance to the communication of rules/regulation to practitioners thoroughly. In consequence, the Committee recommended to establish communication guidelines that connect the operations of all sectors, together with using tools for monitoring and reporting on the progress of such operations. 15.2 In case of the coronavirus disease (COVID-19) pandemic crisis, the Bank must prepare a Business Continuity Plan (BCP) since some employees may need to work from home. The Bank should take into account the compliance with laws and regulations because there may be loopholes that enable the non-compliance from the operations to happen. Therefore, close oversight and proper management are required in order that the Bank can operate business continuously. 15.3 The Committee provided guidelines and suggestions for consolidated supervision in accordance with Bank of Thailand Notification No. FPG. 8/2561 Re: Regulations on Structure and Scope of Business of Financial Business Groups. The supervision must be clearly conducted and cover all issues. 15.4 The Committee recommended about the Market Conduct compliance, which comprises nine (9) systems. Although most of them are related to the central system except the products selling at branches, all systems must be completely prepared and cover all issues. 15.5 The Committee suggested the Compliance and Legal Management Group to encourage Bank’s employees to have awareness and take into consideration the operations that strictly comply with rules and regulations. With the ultimate goal to create a compliance culture throughout the organization, the relevant activity referred to the execution of Krungthai Compliance Champion Project as a good starting point and a role model. Therefore, the Committee recommended the project to be carried out continuously.

(Mr. Teerapong Wongsiwawilas) Chairman of the Compliance Committee 118

Report of the Risk Oversight Committee The Risk Oversight Committee comprises five members - 4 Directors of the Bank and the President. The Senior Executive Vice President - Head of Risk Management Group acts as the secretary of the Risk Oversight Committee. The Risk Oversight Committee performed the duty within scope and responsibility as written in the Risk Oversight Committee Charter delegated by the Board of Directors. In 2020, the Risk Oversight Committee called 12 meetings and reported the performances to the Board of Directors on a quarterly basis. The Risk Oversight Committee emphasizes supervision within the guidelines of regulatory agencies and international general practices (COSO), managing the Bank’s overall risks level to be within the acceptable levels, and managing capital to be within the appropriate and adequate level for the business operation in both normal situation and stress event. Details are summarized as follows: 1. Reviewed the risk management policy covering various risk types, such as credit risk, market risk, liquidity risk, operational risk, reputation risk, risk related to IT systems and other significant risks so as to ensure that the risk management policy was up-to-date and in line with the Bank of Thailand’s notifications and international guidelines. 2. Set up the enterprise risk management framework, comprising key risk indicators, risk appetite, risk tolerance along with conducting report of risk management dashboard by taking into consideration the Bank’s strategic objective plans and corresponding with Enablers and Basel regulation. 3. Supervised risk management to be in line with the designated policies by monitoring performance reports of all risks, closely watching risks arising from economic, financial and banking conditions, the competition and the amendment in official rules and regulations, then assessing impacts and conducting stress test to the Bank’s stability. 4. Expressed opinions on the development of the impairment instrument and model to calculate expected credit loss (ECL) according to the Thai Financial Reporting Standards 9 (TFRS 9), including improving credit management process to mitigate risks and reduce NPLs, as well as closely monitoring Bank’s credit and NPLs portfolios. 5. Screened and commented on the Bank’s strategic plans including key initiatives of the Bank’s Groups in order to ensure that all risks in the strategic plans and key initiatives were considered thoroughly. 6. Emphasized the compliance of information technology risk under the regulation prescribed by the Bank of Thailand, encompassing three frameworks; (1) Confidentiality - to ensure systems and data security (2) Integrity - to generate validity and reliability of work systems and data (3) Availability - to provide work system readiness and availability, while monitoring and tracking the system closely to ensure that it provide service to customers continuously. In this regard, the aforementioned frameworks have been considered as the important policies of the Bank respectively. 7. Supervised and monitored closely on the operation as stated by the orders and observations from the BOT and other regulatory agencies including the AMLO and the SEC. In this regard, the responsible units have been assigned to accelerate the process as well as determined the clear deadlines. 8. Stipulated risk management policy and supervised risk management of the financial business group to comply with the BOT’s guidelines for consolidated supervision as well as efficiently controlled, monitored and assessed risks of the financial business group to be at the acceptable levels. Annual Report 2020 119

9. Regarding the COVID-19 pandemic, the Risk Oversight Committee has directed and monitored the relevant risk management plans so that the Bank can continually operate business as usual. In addition, the Committee also assessed the economic situation that affected the Bank in order to maintain the Bank’s risks within the risk appetite levels. Details are as follows: 9.1 Activated the Business Continuity Plan (BCP) and monitored the results from BCP implementation so that the Bank can continue business as usual, as well as being capable to provide products and services continually, while reducing the risk of COVID-19 infection of the Bank’s employees. 9.2 Assessed trends in the Bank’s financial position and capital after undergoing the impact from COVID-19 pandemic with the purpose to manage the Bank’s capital adequacy to maintain at the adequate level. 9.3 Monitored government measures and policies that provide assistance scheme to public so that the Bank can prepare for corresponding measures to help people and customers respectively, for example, improving the process of credit application and consideration to make it more convenient to obtain assistance measures. 9.4 Assessed and classified customer in groups based on their business performances and debt servicing capacity so that the Bank can stipulate guidelines for monitoring and executing appropriate assistance measures for each customer group.

(Mr. Krairit Euchukanonchai) Chairman of the Risk Oversight Committee March, 2021 120

Risk Factors

1. Overview of the Bank’s Risk Management international standards. Its main principle is to connect the risk 1.1 Risk Management Framework management process with strategic planning and business Technological innovations in the digital economy era opportunities of the Bank in order to help integrate the have caused rapid and disruptive change in economic, social administration and manage risks for the whole organization. and business competition. There are new emerging risks, Additionally, Key Risk Indicators (KRIs), Risk Appetite, Risk Tolerance particularly the COVID-19 pandemic. It caused a decrease in covering all risk factors and Risk Causes have been specified economic activity and severe economic recession around the in order to control risk management within acceptable limits world. As a result, all sectors have to adjust to the New Normal and in accordance with the set targets. Consequently, the Bank approach. It is seen that consumers have more activities on is able to identify the actual risk causes in order to establish online platforms. As for the business sector, the emergence of appropriate management measures and preventive guidelines digital transformation will be faster and more inclusive. These before incurring losses that might adversely affect revenue and factors will further accelerate the growth of the digital economy, capital funds. Risk Management Group was empowered by the thus challenging the Bank in achieving its goals. In this regard, Bank to oversee, monitor, access and report risk performance risk management is one of the noticeable factors that help to the Risk Oversight Committee, the Audit Committee, and the prevent, maintain and encourage the Bank to achieve its goals. Board of Directors on a regular basis. In addition, the Bank has The effective risk management reflects the organization’s good given importance to cyber risk management and data privacy governance, transparency, integrity and moral practice that will by following and monitoring the risk closely to enable the Bank enable the Bank to achieve sustainable growth. to operate its business continuously and safely. The Bank’s risk The Bank, as the leading financial institution of the management framework will enable the Bank to achieve its country, gives emphasis to the systematic and effective risk objectives and goals that shall sustainably add more value to management and control. The Bank has clearly established the organization, the shareholders and the stakeholders. a framework for risk management structure, policies, as well as The Bank continuously encourages its employees at all guidelines for risk management, covering aspects of risk levels to be aware of creating risk culture by communicating management according to the requirements of the Bank of and providing training and seminars about risk management to Thailand (BOT) and State Enterprise Assessment Model. the employees at all levels covering the Board of Directors, top Accordingly, the Bank has also adopted the framework of executives and employees in every department of the Bank. Committee of Sponsoring Organizations of the Treadway As a result, all of them realized the importance and have further Commission (COSO), which is a framework for Enterprise Risk understanding toward risk management, as well as taking Management (ERM). The framework has been regarded as responsibility in regulatory compliance and the Bank’s risk the structure of integrated risk management according to management. The training and seminars shall effectively support Annual Report 2020 121

all departments to achieve the goals and conduct the business committee are provided in section Shareholding and operations in compliance with good corporate governance, Management Structure on page 85 and section Corporate which will help the Bank have further steady and sustainable Governance on page 141. growth. 1.2 Consolidated Supervision 2. Risk and Risk Management Measures The Bank has 19 subsidiary companies in the Financial 2.1 Credit Risk Conglomerate, classified into 4 business groups, namely credit- Credit Risk refers to the risks that may arise from the related business, capital market business, insurance business and counterparties failing to perform in compliance with the covenants general services business supporting the Bank’s operation (support as stated in the contract agreement; including the counterparties’ business). The Bank had formulated policy and risk management credit rating get diminished which shall cause adverse effects framework in accordance with the requirements for consolidated over the Bank’s income and capital funds maintenance. However, supervision prescribed by the Bank of Thailand (BOT) and the the Bank attaches highly attention to the Credit Risk Management identical principles to the Bank’s risk management and covering both in the customer level and in the portfolio level. compliance. Thus, the Risk management system of the Bank is formed with Furthermore, the companies in the Financial Business major procedures, namely Risk Identification, Risk Evaluation, Group are required to report risk management performance to Risk Monitor and Control and Risk Report. the Risk Oversight Committee regularly or whenever significant The Bank has constantly placed great emphasis on credit changes occur. In this regard, risk management performance of risk management such as reviewing and improving policy and respective companies must be monitored closely. manual of credit risk management, monitoring of credit quality The Bank had encouraged the companies under approved through Loan Factory, setting other standards, setting Financial Conglomerate to have the risk management covering standard of credit term and condition for corporate loans, as well as significant risks in compliance with the Internal Capital Adequacy underwriting criteria and product program for retail customers Assessment Process (ICAAP), namely Strategic Risk, Credit Risk, and SME-M loan customers. In order to develop competitiveness, Market Risk, Liquidity Risk, Operational Risk, Reputation Risk, and encourage business growth and monitor risks within acceptable IT Risk. In this regard, the Bank has continuously provided the limits, credit risk management is classified by group of customers training and relevant knowledge to the Financial Conglomerate. as follows: Furthermore, the Bank also oversees that its subsidiaries have • Retail Loans and Small Business Loans used the KRI as the tool for assessment risk and reported the risk The Bank has developed and revised underwriting criteria management performance to the Risk Oversight Committee of and product program for retail loans to be appropriate and the Financial Conglomerate and the Board of Directors of in accordance with the current situation and the notification of the Bank. This resulted in development of the risk management of the Bank of Thailand. The criteria for loan consideration such as Financial Conglomerate successively. borrower qualification, loan amount, loan term, ability to pay, collateral value for mortgage loan, personal loan and sSME loan 1.3 Risk Management Structure have been revised to comply with new products. Moreover, The Bank sets up the organization structure to effectively the Bank has improved credit risk assessment tools and created support risk management with a risk management process that sustainable business competitiveness by integrating risk is in line with principles of good corporate governance. Duty management with business operations and being in accordance and responsibility are clearly segregated for each business unit with the Bank’s strategic plan. However, housing loans continue and the reporting line. The Bank’s Risk management structure to be provided for the country’s leading real estate developers. consists of the Risk Management Committees at policy-level, Most personal loans are provided to officers of government which are the Board of Directors, the Board of Executive Directors, agencies and state enterprises as well as agencies that have the Audit Committee and the Risk Oversight committee. agreements with the Bank. Products for small business loans have In addition, the Board of Directors also appointed other several been developed in line with the Bank’s strategy to continuously committees consisting of senior executives to manage risk in expand credit to sSME customers. various aspects, namely Management Committee, Assets and • Medium Enterprises Loans and Corporate Loans Liabilities Management Committee (ALCO), Group Credit The Bank developed capabilities to access, control and Committee (GCC), Credit Scrutiny Committee and IT Steering monitor and report portfolio-level risk at the level of individual Committee. Details upon the scope of authority of each exposures by designing and developing working process for early 122

risk warning through Early Warning System (EWS), classifying into transactions: loans, investment, contingent liabilities and credit- SME-M customers (EWS for SME-M), SME-L customers (EWS for like transactions including transactions made with the Financial SME-L) and Corporate Banking Center (EWS for Wholesales). Conglomerate to reflect credit risks of the Bank and the Financial Early warning system for SME-M: EWS for SME-M will Conglomerate. signal to notify customer behaviors that are processed from statistical The Bank also places importance on systematic model and workflow according to level of the incurred risk relating to management of qualitative and quantitative databases by automatic review of loan renewal through Credit Review System (CR) creating a large credit risk data mart which collects and stores and editing and improving credit quality through Turnaround System information from databases, for example loan approval data, (TA). Consequently, the Bank can oversee customers since the beginning debt repayment behavior data as well as credit quality data. phase of loan withdrawal. The Bank also provides the full-fledge The Bank utilized credit risk data mart to develop statistical model procedure to daily monitor customers until reaching the date of annual for credit risk management and credit risk rating process of loan renewal. These 3 systems, namely EWS, CR and TA, are cooperated customers so as to monitor and review credit. This database has and associated in the form of the End-to-end Process. also been used for management of the credit quality monitoring Early warning system for SME-L and CBC: EWS so that the Bank could be able to know and evaluate how for SME-L will signal to notify of customer behaviors that are customers’ credit risk changes. The changes shall be notified processed from statistic model and workflow according to level automatically through the EWS end-to-end Process. However, of the incurred risk relating to automatic review of loan renewal such database management also supports the development of through Credit Review System (CR). The system also notifies the a credit risk model for measuring the impairment loss from credit review of credit rating via EWS respectively. risk, which leads to a compliance to Financial Reporting Standard 9 The EWS system also provided a function to notify and (IFRS 9) regarding Financial Instruments, Measurement Criteria, monitor customers’ daily risk, for example indicating last 12-month Impairment. Such process had been conducted by means of risk history, reporting days of delaying payment in each debt the recognition and measurement of loss allowance of financial period (DPD Splitter) classified by loan department in order to assets that requires credit changes evaluation. monitor and control credit quality, risk monitoring for rice mill The Bank developed Industry Direction report or the and field crop entrepreneurs as well as monitoring the compliance classification of industrial group in line with the risk level in order to with the share pledging conditions. The EWS also improved the set as guideline in managing credit portfolio of industrial group notification of loan renewal/ credit review as well as the as well as provided stress test to assess effect of credit portfolio notification of credit rating review in order to notify the officers and capital adequacy. The Bank also monitors/reports risk so that they could monitor and review customers’ credit risks in management results so as to control credit risk to be in consistent every aspect, i.e., finance, liquidity, business operation, ability with credit risk management plan as well as followed the policy to repay, financial statements, use of credit limit and conditions. of risk management supervision by the Bank of Thailand and The Bank scheduled the frequency of credit review in compliance other respective regulators. with the quality of debtors. However, if any factor signals an • Credit Concentration Risk increased risk, a review shall be made before due. It resulted in The Bank pursues policy on assessing risk from credit appropriately monitoring and managing such customer groups’ concentration, investments, contingent liabilities, or credit-like risks by using up-to-date information. The Bank could also increase transactions made available to customers and customer groups opportunities to offer appropriate loan products to customers as prescribed in the regulation prescribed by the authority. and effectively monitor credit policy compliance because the In addition, the Bank also sets the sector limit of transaction volume monitoring information is shown in the system. for each category of industry and country limit of transaction For SME-L and SME-CBC customers, the Bank uses credit volume so as to manage risk diversification and control significant risk rating as a tool for credit approval and credit portfolio credit concentration. With a close monitor for risks, the Sector management, including setting a pricing policy. Furthermore, Limit of respective industry shall be reviewed annually. the Bank also has a process to control and monitor credit risk Besides, the Bank manages country risk by determining rating of major customers by the customer group according to a lending limit for each country in order to control the counterparty Single Lending Limit (SLL) prescribed by the Bank of Thailand risks and credit risk, investments, as well as the contingent liabilities regulation. Such process was conducted through Credit Exposure for customers or counterparties who have a domicile in foreign Monitoring (CEM) that is monitoring single risk, SLL counterparty countries. The Bank also controls the risks by stipulating to report risk and industry risk. Results of Credit risk covered 4 types of credit line usage of agencies at the end of every month in order to Annual Report 2020 123

manage credit usage not to exceed the maximum limit. Additionally, with non-performing loans. Current asset quality may also not the Bank has a process to access each country’s reliability reflect the current economic conditions (Details of the BOT’s by using credit rating from the leading international credit rating guidelines on providing assistance to borrowers affected by agency. the situations that affect the Thai economy are specified in • Counterparty Credit Risk Form 56-1 Year 2020, Part 1, Clause 2.5.3, Policy of Supervision, Counterparty Credit Risk refers to a risk that a loss arising Credit Approval and Credit Monitoring). from the default event of a counterparty in financial contracts. For example, the financial instrument is not traded or the 2.2 Market Risk compensation for any damage is not given as agreed. For Over- Market risk refers to the risk that the Bank may sustain the-counter such as Derivatives, Purchase and Sale of Securities loss from changes in value of the position stated in the statements and Repurchase Agreement (Repo), its risks of a counterparty of financial position and off-the statements of financial position, can cause main risks, namely pre-settlement risk and settlement caused by fluctuation of interest rate, foreign exchange rate, risk as well as the risk from decrease in credit quality of equity price, and commodity price resulting in negative impact a counterparty or Credit Valuation Adjustment (CVA) risk. on the Bank’s income and capital funds. The Bank set credit limit to prepare for both pre-settlement The Bank assigns a department in Risk Management risk and settlement risk by considering factors such as financial Group, which is independent of the Front Office, to control risk status and credit rating of counterparties as well as controlling with the purpose of ensuring transparency and effectiveness in and monitoring transactions not to exceed daily credit limit. accordance with the market risk supervisory guideline of the Moreover, the Bank used Sensitivity Analysis to test the impacts Bank of Thailand and the market risk management policy of the on counterparties if a crisis arises and reports the Risk Oversight Bank. In this regard, risk limit or risk appetite have been stipulated, Committee on a monthly basis. In addition, the CVA Charge is for instance trading book position shall be monitored based on charged in pricing of derivatives transactions with counterparties. value/ investment position, highest loss, the statistical techniques The Bank reduces the risks of counterparties caused from as Value at Risk (VaR) and Sensitivity, while the banking book signing International Swaps and Derivatives Association (ISDA) position shall be monitored based on the net interest income and Credit Support Annex (CSA) with counterparties. These require change and economic value change by formulating practice placement of collateral in the form of cash on a daily, weekly for accommodating the exceeding of approved risk tolerance and monthly basis in the event that the fair market value of any level; appraising price according to market price and regularly contract deviates beyond an agreed threshold. performing stress testing. Additionally, the Bank provides a product • Non-Performing and Collateral Value Impairment Risk program and product assessment for making the new derivatives If non-performing increases, the Bank must have more transaction, improves the form of report, working system and expected credit losses, which will affect its operating performance, tools for evaluating and controlling risk to be effective and financial status and capital adequacy. However, the Bank supports the further complex transactions. initiated the corrective measures for controlling non-performing. The Bank oversees the risk of the companies in financial The business units, which are responsible for credit extension, conglomerates by monitoring risk indicators and requiring the are required to control non-performing amount. Additionally, companies to submit their operating performance report and the Bank carries out the process to manage the customers that risk management result to the Risk Oversight Committee regularly. might become non-performing as well as improving the credit In 2020, the trading book portfolio was still under the limit approval authority and debt restructuring. These actions aim to or the approved risk tolerance level. increase more efficiency to the credit considering process and • Banking Book Interest Rate Risk get better control over risks. Besides, the Bank has continuously Interest rate risk refers to the risk that the Bank’s income enhanced the risk assessment tools, which shall help facilitate or capital funds are adversely affected by changes of interest the process of customer selection to achieve greater efficiency. rates on all the assets, liabilities and off-the statements of financial Furthermore, the Bank has temporarily provided measures position that are rate sensitive items. Such risk might have negative to assist borrowers who have been impacted by the situations impact on net interest income, market values of items in trading affecting the Thai economy during January 1, 2020 to December 31, accounts and other income and expenses related to interest 2021 in accordance with the assistance measures for classification rate. in case of debt restructuring set by the Bank of Thailand. In 2020, due to the global economy severely affected Such measures may decelerate an increase in borrowers by the COVID-19 pandemic, the Monetary Policy Committee 124

(MPC) cut the policy rate to 0.50 percent. The MPC assessed In 2020, Thai Baht interest rates dropped from previous that the Thai economy would recover slowly. The labor market year due to factors such as impact of the COVID-19 outbreak, would remain fragile. This would in turn weigh on private declined US bond yields, appreciation of Thai Baht, etc. However, consumption. Meanwhile, government expenditure would tend the Bank has monitored and controlled interest rate risk within to be lower than estimated. It is expected that it would take acceptable risk appetite by formulating risk limit and indicators, approximately 2 years before returning to normal state of the performing stress testing on monthly basis, requiring presenting country’s economic activity. risk management report to the Executive on daily basis and to In this regard, the Bank has monitored and controlled the Risk Oversight Committee on monthly basis, as well as interest rate risk within acceptable risk appetite by formulating formulating guidelines to ensure readiness in dealing with the risk limits and indicators, conducting stress testing on quarterly breach of prescribed limits as per approval. basis, requiring to present the interest rate environment as well as • Foreign Exchange Rate Risk the economic condition, money and capital market of both Foreign exchange risk refers to income or capital funds domestic and international countries to the Assets and Liabilities adversely impacted from exchange rate volatility that occurred Management Committee. Market Risk Management Department from the foreign currency transactions and foreign currency assets was also required to present risk management report to the Risk and liabilities. When converting all items on the financial statement Oversight Committee on monthly basis. Hence, the Bank also to local currency, it causes a decrease in the Bank’s book value formulated guidelines to ensure the readiness when dealing with and the loss of income or foreign exchange the breach of each prescribed limits as per approval. In 2020, Thai Baht still fluctuated due to the COVID-19 • Interest Rate Risk in Trading Book global crisis, the main factor. The pandemic had caused severe Interest rate risk in trading book refers to the risk that economic slowdown, especially in the tourism sector. As a result, income or capital funds got negatively impacted due to the it also caused Thai Baht to depreciate the most during March - change of interest rate affecting the tenure of bonds and financial April. However, Thai Baht appreciated again at the end of derivatives of which prices are relied on interest rates in trading the year. This was in line with advances in the COVID-19 vaccine book. development, which gave investors more confidence. In this Annual Report 2020 125

regard, the Bank had monitored and controlled foreign exchange monitor risks as well as reporting to their respective managers. risk within acceptable risk appetite by formulating risk limit and Each department has an operational risk officer (ORO) who indicators, performing stress testing on monthly basis, requiring coordinates with the Operation Risk Management Department presenting risk management report to the Executive on daily who oversees operational risks both regarding tool usage and basis and to the Risk Oversight Committee on monthly basis, risk management in accordance with the guideline as specified as well as formulating guidelines to ensure readiness in dealing by the Bank. with the breach of prescribed limits as per approval. Tier 2 Business units which are responsible for monitoring • Equity Price Risk risk and overseeing other aspects provide tools and methods, Equity price risk refers to the risk arising from changes of guidelines and procedures to the business units in Tier 1. equity securities prices giving an adverse impact on income or Tier 3 Audit departments audit and test business capital funds, resulting in decline of investment securities for process and risk management process to assure the Committees trading. that the Bank’s risk management and internal control system are In 2020, the Stock Exchange of Thailand’s index was effective. extremely volatile in the midst of the COVID-19 pandemic. The Bank has formulated risk indicators for managing In March 2020, the index dropped sharply by approximately 215 operational risk in the Bank’s overview by specifying key risk points over a one-month period (down from 1,340.52 to 1,125.86 indicators; Risk Appetite and Risk Tolerance, including stipulating points). In addition, three Circuit Breaker incidents occurred in Standard Operating Procedure (SOP) through various risk control the wake of the exponential increase in domestic infections measures, in both prevention and detection. The purpose of this number before the national lockdown. The interest cut of the is to reduce mistakes during performing duty as well as preventing Federal Reserve Bank and Thailand’s Monetary Policy Committee and reducing damage that might occur to the Bank and its in March and May respectively was also a contributing factor customers. to the market fluctuation. The Bank has standardized risk management guidelines, The Bank had monitored and controlled equity price risk which focus on improving the process to prevent and manage within acceptable risk appetite by formulating risk limit and risk in a timely manner before it causes damage to the Bank indicators, performing stress testing on monthly basis, requiring and customers. Departments in the Bank shall engage in presenting risk management report to the Executive on daily operational risk management, which consists of assessing, basis and to the Risk Management Committee on monthly basis, controlling, monitoring and systematically reporting by using tools as well as formulating guidelines to ensure readiness in dealing such as Operational Loss Data Collection, Risk Self Control with the breach of prescribed limits as per approval. Assessment (RCSA) and Operational Key Risk Indicator (KRI). • Commodity Price Risk Although the wide implementation of IT systems in Commodity price risk refers to the risk arising from changes the Bank’s business operation, whether transaction, launching of of commodity prices that gave an adverse impact on income financial products or services in various forms via electronic or capital funds resulting in decline of commodity price. In 2020, channels to meet the needs of customers who want modernity the commodity price was fluctuating, for example crude oil price, and convenience, may increase operational risk, the Bank has etc. As the Bank did not have the policy regarding positions established a process for considering risks in each products or taking, the Bank managed risk using back-to-back approach. services issuance process. All departments in the Bank are required to conduct an assessment of risks and the efficiency of risk control 2.3 Operational Risk through the product assessment process for new product Operational risk refers to the risk arising from the lack or launches/improvements in order to ensure that the significant deficit in proper internal control, personnel, and the Bank’s working risks are managed and prevented from causing damage to system or external situations. Moreover, it also means legal risk the Bank and its customers. but excludes strategic risk and reputational risk. In the meantime, the Bank manages and controls The Bank oversees operational risk management by the risks arising from outsourcing and insourcing for financial adhering to three-tier risk management approach as follows: business or the government. The Bank also stipulates a support Tier 1 Business units and business supporting units have plan in case that external service providers are unable to operate a good understanding of risk arising in the work process and risk so as to ensure that it will not affect the service provided to in their own unit. As risk owners, business units and business the customers of the Bank. supporting units have a duty to identify, assess, control and 126

As for risks stemming from uncontrollable external factors and responsibilities for related departments in monitoring the beyond the Bank’s control that may affect the main banking liquidity and consistently reporting to the assigned committee. operations, the Bank has stipulated the Business Continuity The Bank also specifies risk liquidity triggers for both Thai Baht Management Policy (BCM) and devise Business Continuity Plan and significant foreign currencies approved by the Bank (BCP) in order to ensure the ability to provide services to customers committee in order to control the liquidity risk to risk appetite without interruption even in emergency or crisis. The BCP is tested level. regularly by the Bank and external service providers so as to 4. Risk Monitoring and Reporting improve its effectiveness and boost employees and customers’ The Bank consistently follows up and reports liquidity confidence. conditions to the assigned Committee, Top Executives and related The Bank summarizes its operational risk status, analyzes departments for acknowledging the existing risk condition and risk causes and reports the risks to top executives and the Risk risk level in order to prepare sufficient investment funds or to Oversight Committee on a monthly basis so that they recognize reduce the risk of lacking liquidity. the risks and can manage risk status to support business The Bank quarterly conducts liquidity risk stress testing consideration. in accordance with the stress testing policy framework of the Bank by using 3 types of situations set up by the Bank, namely 2.4 Liquidity Risk (1) Institution-specific crisis, (2) Market-wide crisis and (3) Crisis Liquidity risk is the risk that the Bank fails to repay liabilities stemming from a combination of both. In each situation, there or contingencies on due date because of inability to liquidate shall be an assumption of the withdrawal of each type of customer assets into cash or having insufficient funds or acquiring funds deposits in different proportions, a decrease of liquidity in the at a higher unacceptable cost thus affecting income and capital liquid assets market, a decrease of the ability to access large funds. sources of investment funds, etc. Moreover, the Bank has adjusted In 2020, liquidity in the financial market increased from the data to conform with the actual behavior in both normal the previous year due to the COVID-19 outbreak. As a result, the and crisis situations. The Bank has prepared a liquidity emergency issuance of fixed deposit products that had mobilized liquidity plan in case of any crisis by taking into account the result of the of the Bank also slowed down. However, the Bank has released stress test in each situation and setting the indicator for liquidity a deposit product to maintain its customer base by focusing on crisis warning. Therefore, the Bank can promptly reduce negative the growth of savings with special interest rates to provide impacts from liquidity problems with reasonable cost. alternatives for customers. As on December 31, 2020, the Bank’s • Capital Management liquidity coverage ratio (LCR) and Net Stable Funding Ratio (NSFR) The Bank has been effectively managing capital funds, was higher than the minimum requirement specified by the BOT. both for the Bank and for the conglomerate, in compliance with The Bank has established liquidity risk management Basel III requirements as prescribed by the Bank of Thailand (BOT) policy and process in accordance with the Bank’s strategy, since January 1, 2013. The three pillars of Basel III Capital Framework market condition and BOT’s liquidity risk management guidelines. are as follows: The key processes of liquidity risk management are as follows: Pillar I Minimum Capital Requirement: The Bank is required 1. Risk Identification to set out capital requirements covering credit risk, market risk Liquidity Risk Management can be done by analyzing and operational risk. a source of risk from the balance sheet structure aimed at Pillar II Supervisory Review Process: The Bank is required identifying the Bank’s liquidity risk. The Bank will analyze source to hold a higher level of capital than the minimum requirements and destination of liquidity used as well as the ability to transform in Pillar l in order to accommodate for all risks that the Bank shall assets into cash. face in both normal situations and stress events. The Bank is 2. Risk Measurement required to have good risk management by performing Internal Liquidity risk can be measured from estimating cash Capital Adequacy Process (ICAAP) while concerning all its risks flow and off-balance sheet for analyzing liquidity gaps or financial and conducting stress tests appropriately. ratio analysis for knowing the tendency of liquidity risk. Moreover, Pillar III Market Discipline: The Bank is required to disclose the Bank also sets a survival period that the Bank can sufficiently information on its capital requirements, level of risks and risk manage liquidity under critical situations specified by the Bank. management system to the public so that the outsiders and 3. Risk Trigger and Risk Control stakeholders can use such information to analyze and assess The Bank controls liquidity risk by assigning duties the Bank’s risk. Apart from the Bank’s internal control and the Annual Report 2020 127

supervision of the Bank of Thailand, the disclosure is an essential 1. Technology and connections to prevent cyber market mechanism that forces the Bank to have an effective inherent risk from vulnerabilities of new technology that have not risk management system. yet been detected, old fashioned technology, insecure The Bank has always been operating in compliance with connection, fraud from third parties or management of the risk management standards and overseeing capital adequacy security of hardware, software, information and work systems. according to BOT’s regulations and international guidelines. 2. Service channels that are connected to external Stress tests covering significant risks in both normal and stressed networks such as internet banking, mobile banking or the Bank’s situations have been carried out to evaluate the effect on website for preventing cyber risks across all service channels. capital adequacy. The Bank has studied the effect of Basel III 3. Products and services such as real-time online money for the purpose of capital planning and setting the Bank’s transfer transactions and technology services to government dividend policy. organizations. As at 2020 year end, the Bank’s capital adequacy ratio 4. Hire of external service providers in responding to (The Bank’s Financial Conglomerate) was 19.11 percent. After the operations of information technology for controlling the risk stress testing, CAR was higher than the minimum requirement set of cyber-attacks. by BOT. This reflected the Bank’s strong capital fund, which was 5. History of cyber threats or past cyber-attacks capable of accommodating business expansion and possible such as phishing, malware, social engineering or DDoS. risks stemming from changes in economy, society and regulations. The Bank has a business strategy that focuses on As for the BOT consolidated supervision requirement, the integrated electronic banking services through implementing Bank submits a report on capital adequacy of the conglomerate sophisticated and diverse new technologies to manage its to BOT quarterly and discloses information on capital fund and information technology infrastructure, product development and risks of the conglomerate as scheduled on the Bank’s website. providing more financial services. The Bank has operated business In this regard, the Bank and its financial conglomerate’s capital in many countries and also provided information technology adequacy was higher than the minimum requirement of BOT. systems to third parties accordingly. However, the Bank of Thailand and commercial banks The Bank has established guidelines for cyber risk have been considering the revision of risky asset calculation management and security control measures and has tools for covering credit risk, market risk and operational risk in order to identifying, evaluating, monitoring, mitigating, controlling and comply with the Framework of Basel Committee on Banking reporting risks in a timely manner. The guidelines for cyber risk Supervision (BCBS) in the future. In this regard, the Bank has management and the required security controls for each maturity performed Comprehensive Impact Assessment (CIA) in terms of level, i.e., baseline, intermediate, and advanced cover 6 main bath quantitative and qualitative aspects so as to prepare for aspects of cyber risk management as follows: business operation in the future. 1. Governance is a guideline for cyber resilience. Cyber resilience strategy and policy, risk management, internal audit, 2.5 Cyber risk personnel allocation and development, overall supervision and Currently, the Bank uses technology and information risk management of the organization are formulated in technology systems as the main engine in driving business. accordance with the same standard. Therefore, the Bank prepares for the risks arising from cyber threats. 2. Identification is a guideline for determining the scope The Bank maintains a strict and strong security against cyber and method of cyber risk assessment, information technology threats as well as being ready to deal with cyber threats by asset management. This includes adding, migrating, moving and providing a supervisory framework and risk management in terms setting up hardware devices, data software and related work of people, processes and tools to reduce the impact on customers systems to be able to manage, control and mitigate risks and the reputation of the Bank. appropriately and promptly. The Bank has established regulatory guidelines for 3. Protection is a guideline for controlling and Information Technology Risk Management, conducts Cyber preventing risks of information technology infrastructure, covering Inherent Risk Assessment and stipulated cyber risk management network systems, hardware accessories, data software and work guidelines. Additionally, the Bank specified the security control systems such as setting up the work system, access control, data measure (Maturity level) based on 5 fundamental risk factors in security, secure work systems development, patch management information technology as follows: to control or minimize the impact on cybersecurity. 128

4. Detection is a guideline for finding, testing and and/or capital funds both at present and in the future. Moreover, managing vulnerabilities in information technology. It is able to reputation risk may result from operational risks due to the non- detect, analyze, monitor and alert cybersecurity incidents to the compliance with the regulations of the government/regulators, organization or the responsible person so that corrective action acting against the ethical practice or social expectation or can be taken. business standards, violating terms and agreement or providing 5. Response and Recovery is a guideline for cyber unfriendly services to customers. incident response management, i.e., preparing and testing The Bank manages reputation risk in addition to other an incident response plan, investigating and analyzing causes, important risks. A guideline for reputation risk management has resolving incidents, and preparing reports for submission to been established and reviewed as per schedule or whenever the Bank’s designated committee. there is a significant change. As for risk management procedure, 6. Third Party Risk Management is a guideline for the Bank has defined risk factor, reputation risk index as well as managing third parties, covering the employment contract, Risk Appetite and Risk Tolerance. Risks are monitored by observing assessing the suitability, tracking and evaluating performance, indicators and a report is submitted to the Risk Oversight and reviewing performance results. This is to ensure that the Committee on a monthly basis. If any indicator is higher than external service providers can perform the tasks for the Bank the acceptable level, it must be reported along with clarifying according to the specified goals and conditions without causing the relevant reasons and action plan to eradicate/mitigate cyber risks that affect the operations and services. the risk. The Bank gives precedence to information technology • Strategic Risk covering applications, information, infrastructure, operation, Strategic risk is the risk generated from inappropriate people and process in an attempt to establish IT Best Practices strategic planning, operation and implementation not in line that help prevent any risk or damage that might occur to the with internal factors and external environment producing Bank. The IT Best Practices prescribed by BOT are under 3 major undesirable impacts on income, capital funds or business survival. principles as follows: The Bank continued to operate its business with caution - Confidentiality and attached importance to action plans and risk management, - Integrity which can be summarized as follows: - Availability 1) The Bank’s measures for strategic risk management Nevertheless, the Bank has declared policy and are in line with Bank of Thailand’s examination guideline and procedure of IT security protection and reviewed the standard State Enterprise Policy Office (SEPO)’s enterprise risk management. of IT security to comply with current regulations of the Bank of Policies and guidelines on strategic risk management have been Thailand or meet international standards. IT Steering Committee devised and reviewed annually. was appointed to oversee the Bank’s IT risk in order to give 2) The strategic planning process was comprehensive suggestions that will improve the process and boost confidence and in line with the guidelines for State Enterprise Assessment in the Bank’s IT security, consider risks that may pose threat to Model. Procedures and persons involved as well as time frame the Bank’s operation and boost confidence in the Bank’s IT were clearly specified. Committees concerned and top executives security and prepare for Personal Data Protection Act (PDPA). participated in the strategic planning that included the transformation of the plan into actual practice and communication 2.6 Other Related Risks of the plan to executives of all business units across the board. • Reputation Risk 3) The Bank’s strategic plan is appropriate for both Reputation risk stems from the public’s perception of the internal and external environment. It focuses on using real data Bank’s negative image or lack of confidence in the Bank as the and analyzing in comparison with the Bank’s and peers’ targets. Bank’s main business involves providing services to the public, SWOT Analysis was performed to determine further strategies to which includes customers, partners, investors and regulators. enhance the strengths, rectify the weaknesses, capture business While the communication network at present allows quick spread opportunities and prevent any threats from external pressures. of news and exchange of information, it also a channel to spread These were combined into the Bank’s overall strategy, both short rumors and comments the public may have about the Bank. term and long term, which responds to the statement of Direction This will reflect the Bank’s image and the stakeholders’ confidence (SOD), Vision, Mission and Core Values of the Bank. in the Bank, which may have an impact on the Bank’s revenue 4) The Bank monitors and compares its operating Annual Report 2020 129

performance with the targets regularly, and reports to executives for affected persons and social and economic recovery measures to set strategies to achieve the targets. Action plans are reviewed through Emergency Decree Authorizing the Ministry of Finance and adjusted to fit changing conditions. to Raise Loans to Solve Problems, to Remedy And Restore the • Properties for Sale Risk Economy And Society as Affected by the Coronavirus Disease The majority of the Bank’s properties for sale were Pandemic, B.E. 2563 (2020), a total value of not over one trillion impairment of assets, which is caused by the changes of properties Baht. In this regard, the Bank of Thailand (BOT) has formulated condition or environment, for instance physical deterioration measures in conjunction with financial institutions to assist of the property, flooding, natural disasters, economic situation, borrowers such as debt restructuring, moratorium, payment and the decreased price of property after being affected by deferral as well as supporting new soft loans, enhancing liquidity the current market situation, laws and city plan and utilization to stabilize the private bond market and relaxing monetary policy of property. These factors affect the Bank’s capability to sell. by reducing the policy interest rate to 0.5 percent. The Bank The risk level depends on property types, quality of property, closely monitored and assessed domestic and international and change of market price and duration of ownership. economic, social, financial and banking risks with analysis of However, the Bank has developed a guideline on minimizing risks positive and negative effects in order to report to different as well as monitoring and controlling risks within acceptable limits committees respectively. The Bank also signaled to relevant such as consideration of property purchase or transfer for debt departments about this matter. This allowed the Bank to adjust repayment to be appropriate according to property type and its strategies to suit the changing situations. property quality, property valuation in a time frame to reflect Thai economy in 2021 is likely to recover from recession, market price, managing the properties to be ready for sale, however, it is still full of high risks. It is expected to grow gradually setting marketing strategy and reasonable selling price, etc. at 2.5 percent due to a major risk of COVID-19 resurgence, The objective is to accelerate the selling of Bank’s foreclosed resulting in the restriction of domestic economic activities properties. throughout the first quarter, especially in terms of travel as well as In addition to risks from impairment or reduced value of affecting the domestic demand. In addition, the continued assets or depreciation mentioned in the previous paragraph, drought from the previous year is likely to affect farmers’ income the Bank still has an obligation to reserve a provision for correspondingly. Therefore, when considered together with the foreclosed properties that the Bank holds exceeding duration to be high level of household debt, it is anticipated to cause the private in accordance with the Bank of Thailand’s regulation on Asset consumption to expand in a constrained manner. Nevertheless, Classification and Provisioning of Financial Institutions. In 2020, the government is anticipated to expedite economic recovery the Bank had some quantity of foreclosed property that reached and rehabilitation policies, such as measures to remedy affected provisioning date. In this regard, the Bank had provisioned for people, together with accelerating the budget disbursements this part of foreclosed property in accordance with the and executing measures to support consumption and investment abovementioned criteria correspondingly. continuously in an attempt to help drive the economy and • Economic Condition Risk mitigate the impacts. As for monetary policy, the policy interest The world economy in 2020 enters recession due to the rate from the Bank of Thailand is projected to be fixed at a low pandemic of COVID-19 around the world and in Thailand, rate. Relating to the external factors, many of them spring out affecting the business environment. The global economy shrank from several risk factors. Besides the COVID-19 outbreak that by 3.5 percent for 2020. That would be the worst annual plunge continues to spread around the world affecting the demand for since the Great Depression. Global economic recession and Thai products, the US international trade policy is still uncertain measures to prevent the spread of COVID-19 has affected the from the inauguration of President Joe Biden. Additionally, the Thai economy where its structure is highly dependent on foreign container shortage problem in export as well as the appreciation countries, especially on tourism and exports. Furthermore, of Thai Baht are together turning into risks that have a direct epidemic control measures have restricted domestic economic impact on Thai exports. In this regard, the Bank will continue to activities, affecting domestic demand and the employment. monitor economic risks closely, as well as assessing the impacts As a result of these impacts, Thai economy in 2020 contracted by under stress testing covering various situations that may happen. 6.1 percent from the previous year. The recession has had This will promptly reduce the impacts that may have on business a broader impact, causing the government to take measures to operations in time. provide assistance to business sectors and affected people, i.e., public health measures, remedial and compensatory measures 130

Internal Control and Risk Management

The banking business has to respond to the changing business 1. Control Environment environment and service users’ demands caused by technology, The Bank is continually committed to corporate governance including the outbreak of the emerging infectious diseases operation. Its executives and personnel have a positive attitude and Coronavirus 2019 (COVID-19). The Bank, as part of the support value towards internal control. This has encouraged all personnel for the government’s Thailand 4.0 policy, wishes to drive the in the organization to have a good awareness in performing country with creativity and innovation. Risk management and their duties with the focus on management according to corporate internal control is one of the mechanisms for efficient, transparent governance principles. Furthermore, they place importance and examinable operations. Therefore, the Bank places on ethics, integrity, and compliance with rules and regulations, an importance on operating the business for Thai people with developing knowledge, skills and competence of the employees. sustainability, along with maintaining good internal control and The Bank had implemented according to its vision, Growing Together risk management. for Sustainability. In addition, the Bank focused on building a public trust. Accordingly, the Board of Directors and the Management It had established a strategy and guideline for implementing has attached importance to the internal control through the Krungthai Moral Initiative (Sustainable Krungthai) Project. continuous monitoring and oversight so as to obtain reasonable The Bank had also raised the corporate governance standards with assurance that the Bank achieves its objective of efficient and the goal of implementing them into action for tangible results effective business operations, trustworthy financial and throughout the organization as follows: operational reporting, corporate compliance, as well as preventing the actions adversely affecting the Bank’s asset and • Corporate Governance Strategic Plan: The Bank reputation according to the standard of the Committee of developed the Corporate Governance Strategic Plan of Krungthai Sponsoring Organizations of Treadway Commission (COSO), and Bank Plc. 2017-2021 under the Sustainable Krungthai Project. the Ministry of Finance’s regulations on Standards and Guidelines It is in line with the National Strategy on Anti-Corruption Phase III of Internal Audit for Government Agencies B.E. 2561 (2018). (2017-2021), which aimed to create an organization with zero It is referred to international standards and tailored to the context tolerance to corruption. It consists of the following. of government agencies. The Bank’s Board of Directors 1) Create a Society Which Does Not Tolerate Corruption had assigned the Audit Committee to review the effectiveness of 2) Promote Ethics Will to Fight Corruption the internal control system in accordance with COSO standards 3) Develop Corruption Prevention Systems and/or other suitable standards, including the internal control of 4) Raise the Standards of Corruption Suppression the Bank’s information system. This is to ensure that the Bank’s internal 5) Improve Integrity and Transparency Assessment (ITA) control system is adequate. In this regard, the Audit Committee Score shall report to the Board of Directors monthly. • Tone from the Top Chairman of the Board of Directors, The Audit Committee approved the internal control assessment Directors, President, Group Heads, and employees of the Bank audit report of the internal auditors. According to the Committee, announced their will to work with integrity, transparency and the internal control of Krungthai Bank PCL. is sufficient with constant morality to develop standards of morality and ethics, and instill compliance and is in accordance with the Guidelines of Internal good values and conscience. They adhered to corporate Audit for Government Agencies B.E. 2561. governance policy, complied with rules and regulations, as well as operating with transparency in order to create a zero-tolerance The COSO Internal Control Guidelines consists of five main corporate culture. components: 1. Control Environment • The Bank operated activities/projects under the 2. Risk Assessment Sustainable Krungthai Project by using the Inside-out Blasting 3. Control Activities approach to provide opportunities for supervisors and employees 4. Information and Communication to participate in brainstorming on methods to prevent and reduce 5. Monitoring Activities corruption. They also engaged in finding means to improve work processes to comply with rules and regulations in order to develop The Bank operates in accordance with each components moral and ethical standards, driving the Bank to be a moral of internal control as follows: organization model with international standards. Annual Report 2020 131

Besides, the Bank attached great importance to Employees’ skill and knowledge in design thinking, data analysis, the implementation of the Anti-Bribery and Corruption Policy. It had and IT is developed. The Bank facilitated its branch employees communicated a clear guideline continuously through articles via in developing their digital banking skills such as management E-mail and Intranet, for example, emphasizing on No Gift Policy and creating good experiences for customers in using digital and communicating the BOT’s Market Conduct regulation regularly. channels, and fundamental knowledge and features of Krungthai The objective is to promote and support responsible and fair NEXT application. In addition, the Bank emphasized Market management of customer service. Conduct by instructing its employees of all branches nationwide to provide complete and accurate information to customers for The Board of Directors and the Audit Committee supervised important decisions making without forcing them to buy and monitored the damage prevention process management the Bank’s products. and internal control process. In this regard, the Audit Committee held a meeting to consider the audit report and credit review The Bank also pays attention to customer complaints results of the Internal Audit Group every month. The committee by establishing the Customer Complaint Center for receiving offered observations, recommendations, and guidelines customer complaints in order to coordinate with relevant business to prevent any damage that may occur to the Bank. Apart from units in solving problems. An SLA based on the type of complaints that, the Audit Committee also presented the audit and credit is set. The Customer Complaint Center also analyzed and solved review results to the Board of Directors for their awareness or for problems to meet customer needs and reported the results to the Management to take action. As for reviewing the Bank and the executives every month. its subsidiaries’ monthly financial statements and profits, a meeting with the Financial Management Group and a meeting with 2. Risk Assessment external auditors were arranged every month and every quarter The Bank places great emphasis on the continuous respectively. They provided useful observations and suggestions. development and improvement of its risk management process. Lastly, the Audit Committee summarized the performance of The Risk Management Group acted as Second Line of Defense its duties and reported to the Board of Directors. to oversee the overall picture of the Bank’s risk management. The Risk Management Group plays a role as a center for The Bank has an organizational structure which is appropriate developing risk management systems and connecting the entire for business operations based on the 3 Lines of Defense principle, organization. It also followed up and reported the status of each as well as in accordance with the good risk management and type of risk to the Bank’s committees, which are: The Board of internal control with clear separation of duties and responsibilities. Directors, the Audit Committee, the Risk Oversight Committee, A business unit was assigned to review and inspect operations and the Management Committee. to be in accordance with the organization’s rules and regulations. The employees were assigned their responsibilities clearly and In the meantime, the Bank recognizes the importance of in writing. Moreover, a scope and level of approval authority for enterprise risk management, which is a risk management process each management is delegated. Human resource policies and necessary in leading the organization to success. Enterprise risk procedures are appropriate to motivate and support employees. management includes each aspect of risk management, namely strategic, credit, market, liquidity and operational risk. A Risk In terms of human resource management, the Bank places Management Dashboard has been established. It identifies/ importance on its employees through continuous employee analyzes risk causes and risk management methods in order to engagement projects. The objective is to make Krungthai Bank summarize information on each aspect of risk management and “the Best Place to Work”, the employees’ second home. The Bank continually report to the Risk Oversight Committee (ROC). established policies, guidelines and assigned each business unit to undertake actions to enhance its employee engagement. Accordingly, the Bank continually emphasizes information technology risk management. The information technology The Bank communicates its strategic plans and business key risk indicator (IT-KRI), which is a leading and lagging Indicator, plans, including setting important goals for employees in was implemented in risk monitoring in accordance with the organization for acknowledgement and for operations in the following principles. the same direction. 1. Confidentiality 2. Integrity In particular, the Bank highlighted the human resources skills 3. Availability: The indicator helped the Bank to be able and knowledge development plan which is in line with its strategy. 132

to effectively prepare itself in case of information technology The Audit Committee has been assigned by the Board of risk and to prevent impacts on the Bank’s services, work systems Directors to review the effectiveness of the internal control system and reputation. and the financial reports together with the auditors and the Financial Management Group to ensure that financial statements and financial The Bank also made a self-risk assessment report covering reports are made in accordance with the requirements of the law five risk areas regularly at least once a year as required by and generally accepted accounting principles, and the disclosure the Bank of Thailand. Correspondingly, the Bank also conducted of information is adequate, complete, timely, reliable and beneficial an internal control evaluation every year in accordance with to the users of the financial statements. The committee has also the Ministry of Finance’s regulations on Standards and Guidelines of followed up the effects of new Thai Financial Reporting Standards Internal Audit for Government Agencies B.E. 2561 (2018). (IFRS 9). The Board of Directors and Management has given The report will be presented to the Audit Committee and the Board importance to the review and monitoring of the Bank’s performance of Directors. At the business unit level, the Bank requires all units by focusing on achieving the Bank’s objectives and monitoring to conduct a Risk Control Self-Assessment (RCSA) in order to actual performance, compared with the past performance and identify and assess the risks that may arise by taking operational performance of the Bank’s competitors. loss incident and observations of the Internal Audit Group into account. Each business unit has appointed an Operational Risk The Bank has operating regulations on asset protection: Officer (ORO) to be the coordinator within the unit and there is limited access to assets at risk and taking care of the property to cooperate in the process regarding the operational risk in a strict and adequate manner. There is a control registration, management tools of their business unit. follow up of the cause and improvement on the difference. There is an information system control in terms of processing, data Nevertheless, the Bank has stipulated a Business Continuity transmission file backup. There is a computer system provision Management Policy, which requires the Bank’s core business to and development and maintenance of the work system in have a Business Continuity Plan (BCP), an Information Technology the information system to be sufficient and suitable for the needs of Contingency Plan (ITCP) for important work systems. The objective the organization. Additionally, an annual review of the internal of the plans is to ensure that if transactions or work systems control of the information system is conducted by the Internal are interrupted, business units will still be able to work continuously Audit Department. or be able to resume work within a reasonable time. The Bank also prepared an Alternative Site to support the BCP and However, the Bank has attached great importance has regularly tested the plans for further improvement and efficiency. to promote and support the implementation of the information security policy. The Bank has taken several data privacy measures, The conduction of Product Assessment is a cooperation for example, closure of USB port and CD/DVD drive, tracking between the product owner business unit, the Compliance and data breach, management in case of phishing incidents Legal Management Group, Risk Management Group, Operation happening to customers, etc. In addition, information technology Group, and Financial Management Group. In product assessment, systems are introduced to reduce the risk of employee mistakes outsourcing, insourcing, the business unit shall assess the risks that in regards to customer identification in order to prevent risks that may arise from outsourcing, along with establishing guidelines may arise from making fraudulent transactions to withdraw funds for controlling the risks that may arise. from the customer’s account. Such action affects the image and customers’ confidence in the Bank. 3. Control Activities The Bank has realized the importance of operational Besides, the Bank has information classification. Each processes and internal controls by setting policy frameworks and department is required to set a level of confidentiality of internal operating regulations. Authority and responsibilities as well as information and to educate all employees about the importance the scope of each employee level’s authority to approve each type of keeping information which may affect the Bank’s operations of transactions is clearly set in writing and has communicated if certain information is disclosed to third parties. The Bank regularly to employees within the organization. The Bank has also reviewed reviews its procedures in terms of confidentiality and disclosure internal operating regulations such as account opening of customer information. procedures, credit procedures and electronic products provided by the Bank to be clear and up-to-date, including policies, SOP Coping during the COVID-19 pandemic, the Bank had manual in order that employees easily apply them to their a policy that employees are grouped by the Bank’s BCP operations and provide customers fast and accurate services. implementation. For critical bank transactions, employees were Annual Report 2020 133

grouped to work at backup sites in order that the Bank’s It is an open Platform that allows other organizations to connect transactions were able to conducted continuously. Likewise, to the system to create a digital wallet such as the SorBorMor some employees were ordered to be able to Work from Home; Wallet and Health Wallet to support all future financial activities the Bank has improved work processes and developed a work with the highest security. The world-leading technology is used support system according to the New Normal. Supervisors had in the new version of Krungthai NEXT to provide services to a guideline to follow up the work and employees were emphasized the Bank’s customers, using the services easier in one application to follow the guideline strictly. Human Resources and Corporate with Cloud Native technology building 3S environment as follows: Governance Group has made documents to effectively support 1. Scalability - Support a large number of simultaneous Work from Home, for example Performance Management Manual financial transactions during a high demand period under the Flexible Working for supervisors and employees, Practices 2. Stability - Be stable and easy to use in appropriately working from home (not break employees’ 3. Security - Provide the highest security with world-class discipline) while maintaining and driving productivity to a higher technology level with various technologies, as well as adjusting the mindset to be ready for the change to the New Normal. Inclusively, the Bank has also applied artificial intelligence (AI) technology to interact with users through Smart Transaction 4. Information and Communication that will learn and list frequently used financial transactions. Smart The Bank has processes to control work systems: Banner will alert important services such as the due payment of the development of the systems, testing the systems and monitoring insurance premiums, renewal of credit cards and debit cards the system usage including effective change management. and a birthday reminder. The systems are tested and validated by the system administrator or owner who gives requirements, and related persons. In addition, Furthermore, the Bank has adjusted user experience (UX) the Bank has managed the information system security together and user interface (UI) so that users can open the app with face with KTBCS in accordance with the information technology authentication by scanning their face and ID card to prove and security policy, including reviews of the general control standards verify their identity, facilitate and resolve the problem of forgetting of information systems by the Internal Audit Group. username and password and can change mobile phone numbers or email to receive OTP by themselves, no need to waste time The Bank has raised awareness of the safe use of technology, on traveling to a branch. which is important for all employees to always be aware of. This aim to protect ourselves and the Bank’s information assets The Bank has a process for creating an information system to be safe from the ever-increasing cyber threats and to be that supports the report of risk impact assessment and early in line with the Personal Data Protection Act. warning system of incidents or risks that will occur, which has The Bank has procedures and guidelines used in an a serious impact on the organization systematically through emergency case and a case of systematic support for business Enterprise Risk Management which is reviewed annually. continuity to enable the continuous availability of hardware and The Bank also has a Fraud Monitoring System in order to prevent software systems as well as data and information to meet needs and reduce damages to customers and reduce errors in case of of customers and business effectively. They are as follows: branch staff failing to comply with the Bank’s operating 1. Business Continuity Management Policy (BCM) and regulations. It provides a support system for compliance with Business Continuity Support Plan (BCP) various fraud area controls, including card & cyber fraud, branch 2. Operational processes of IT Contingency Plan (ITCP) fraud, merchant fraud, account fraud, etc. Moreover, the Bank 3. Preparation of backup sites under the BCP plan and has knowledge sharing both internally and externally to employees Disaster Recovery Center and customers to create financial awareness on financial crime 4. Testing BCP and ITCP & fraud on a monthly basis via social media such as Line, The above processes are regularly reviewed/revised by Facebook, etc. The Bank provides training courses both inside the Bank in order to be able to put into practice in accordance and outside the Bank and its subsidiaries regarding IT risks with the changing situations. such as Cyber Risk, Cyber Security, as well as conducting workshops and communicating articles via email in the topic of Principles In 2020, the Bank continued to develop technology and of risk management in information technology. new services by improving Krungthai NEXT application to cover more banking services and to prepare it for becoming the Full-scale Digital Banking, which is more than a typical banking application. 134

The Bank’s executives have communicated its strategy and has discrepancies from the plan, the Management must analyze declared its intention to be an organization with zero tolerance and manage the plan in accordance with the set objectives. culture: activities were conducted with various departments and articles from the executives were published to all employees. For KRI follow-up, the Bank has a risk impact analysis report Branch managers had two-way communication with staff in their and early warning system of incidents or risks that will occur. teams in the morning of each day to know and understand their This has a serious impact on the organization systematically through roles and responsibilities in relation to the key information issues the Enterprise Risk Management process in the form of and guidelines for internal control to prevent risks. The Bank has Risk Management Dashboard presented to the Risk Oversight a telephone number to contact Call Center +662 111-1111 and Committee on a monthly basis to timely report on the signs of has various channels for communicating information or introducing the overall risk indicators of the organization, risk status the Bank’s products to general customers via social media such as and guidelines for corrective actions or improvements. Line Official, Krungthai Care, etc. The Bank also established The Risk Oversight Committee has ordered and requested for complaint channels for whistleblowing: via email to the Chairman more information in order that the Bank can achieve its objectives of the Bank; letter, e-mail and telephone to contact the Whistle of internal control effectively and efficiently. Blowing team or additional channels for employees, i.e., sending email to the HR Head Group and calling the Employee Relation In the event of internal and external corruption, employees’ team, the Discipline and Employee Relation Department. mistakes, system failure/ interruption/ malfunction, the Bank Additionally, information obtained from outside the organization will be fined by the government agency and punished with other and internal information has been communicated to actions that may have a significant effect on the organization. the executives and users within the organization through various The Bank has set a process for business units that are channels such as Intranet and various publications in a way that the First Line of Defense to report incidents through the Bank’s helps recipients of information perform their responsibilities system immediately or within the day the incident is detected. effectively. This is to ensure that such internal and external An incident report is made to analyze the root cause, the sufficiency communication has made the organization achieve its objectives of the control approach and to set a solution or prevent such and goals. cases from recurring. In 2020, the Bank was concerned about the health of However, if such an incident affects many business units its employees and implemented a measure to prevent the risk of or involves various agencies, the Risk Management Group will hold COVID-19 infection. Human Resources and Corporate meetings with relevant departments to jointly consider additional Governance Group, therefore, has raised awareness of control measures or improve the previously established control the importance of daily self-declaration, communicated self-care guidelines by considering the cost-effectiveness, and then guidelines to reduce the risk of COVID-19 infection, promoted it will be proposed to The Management and the Risk Oversight social distancing by rearranging desks and seating, and Committee (ROC) respectively to report information or consider established a COVID Hotline to answer questions related to health giving opinions further. risk assessment and operational guidelines that are consistent with the Bank’s COVID-19 protection measures. Meanwhile, the Internal Audit Group’s responsibilities are to assess the adequacy and effectiveness of operational processes 5. Follow-up activities and information systems, internal control and risk management The Bank continually monitors, assesses the internal control on the mission and scope of work, along with giving advice and results and the quality of operations through the evaluation of consultation, suggesting methods or measures for improvement two indicators: Key Performance Indicator (KPI) and Key Risk in order to work efficiently, effectively, economize, prevent Indicator (KRI). corruption and have good governance. For KPI follow-up, executives and assigned persons have The Compliance Committee has overseen the Bank monitored performance from the Bank level to department level to manage risks arising from non-compliance with laws and by employing different reporting tools and formats as appropriate regulations, including considering and monitoring for the job description and report user’s needs so that the implementation of the risk management plan in accordance a department has a complete, accurate and timely report for the with Compliance Program on a regular basis in order to comply monitoring of performance and the Management can compare with the regulations of the external regulators through the performance with the plan. If it is found that the performance the Compliance and Legal Management Group. Moreover, Annual Report 2020 135

the committee has overseen the compliance with the rules of Ms. Vipawadee Lerssrisuriya the financial business group and formulated business policies/ Executive Vice President - Sector Head business strategies for financial business groups to report to Compliance and Procedures Sector the Bank of Thailand annually and every time there is a significant change. Date of Appointment August 15, 2017 - December 15, 2020 Head of Internal Audit and Head of (Resigned from the Bank on December 16, 2020) Compliance of the Bank Responsibilities of Regulatory Compliance 1. Head of Internal Audit Responsibilities of Regulatory Compliance are to oversee Mr. Panabhand Hankijjakul the regulatory compliance and ensure that the Bank and First Executive Vice President - Head of its business units operate the business in accordance with relevant Internal Audit Group laws and regulations prescribed by the regulators, namely the Bank of Thailand, the Securities and Exchange Commission, Responsibilities of Internal Audit the Stock Exchange of Thailand and the official authorities as well as Internal audit provides the management and the Audit providing advice on regulatory compliance practices. Committee with confidence and counsel, which constructs for The Committee has been assigned as the coordinated agent value addition and improvement to the Bank’s operation to to facilitate cooperation between the regulators and the official achieve its goal by means of assessing the adequacy and authorities and the internal business units of the Bank. In this regard, effectiveness of risk management process, internal control and the Committee has to communicate the internal units of the Bank corporate governance. about the new and amendment of law and regulations. The Audit Committee expressed the opinion that (Their biography, namely education, training, other Mr. Panabhand Hankijjaku was suitable for performing as the Head current positions and work experiences from the past 5 years is of Internal Audit since he had comprehension and experience shown in the unit of Brief Biography of Board of Directors and in banking business, and expertise in credit risk management. Executive Officers on page 29). He had experience in credit risk management for the Bank for more than 5 years and other banks for more than 5 years with 3. Head of Accounting and Finance aims for efficient credit risk management processes in line with Ms. Saranya Vejakul rules and regulations of related agencies. Senior Executive Vice President - Head of Financial Management Group The Audit Committee’s responsibilities included: to consider and approve the qualification, to appoint, to demote Responsibilities of Accounting and Finance and to remove the Head of Internal Audit (The additional details Responsibilities of Accounting and Finance are to plan are provided in the section of Shareholding and Management investment management strategies and liquidity operation to Structures on pages 91). be at an appropriate level. It also supervises business operations of companies in the financial conglomerate, evaluates His biography, namely education, training, other current the performance of state enterprises between the Bank and positions and work experiences from the past 5 years is shown the Ministry of Finance, including overseeing the overall financial in the unit of Brief Biography of Board of Directors and Executive plan of the Bank to be in accordance with its strategy. Lastly, Officers on page 33. it manages the Bank’s information system for internal management use and reports to external regulators effectively. 2. Head of Compliance Mr. Pongsit Chaichutpornsuk (Her biography, namely education, training, other current Senior Executive Vice President Head of positions and experiences during the past 5 years is shown Compliance and Legal Management Group in the unit of Brief Biography of Board of Directors and Executive Officers on page 31). Date of Appointment December 16, 2020 - Present 136

4. Chief Accountant - 2019 Digital Transformation in Banking for Financial Mr. Kanok Suwanaratana Management Group First Vice President - Department Head - All Topics of 2018 TFRS Accounting Department, Financial Management Group - Cost Management to Increase Value and Sustainability Date of Appointment - New Thai Financial Reporting Standards (TFRS) for May 15, 2019 2019 and 2020 - FMG’s Journey Education - Law Related to Debt Restructuring - Master Degree : Economics, Thammasat University - Derivatives and Financial Instruments - Bachelor Degree : Accounting, Chulalongkorn - IFRS Update Conference at Toronto Canada University - Integrated Reporting - Certified Public Accountant (CPA) (Thailand) - Forensic Accounting - Tax Planning Training Course - TFRS 9: Financial Instruments - Hedge Accounting Work Experience (2016 - Present) (Intermediate Workshop) (2020) - Krungthai Bank PCL. - TFRS 9: Financial Instruments - Hedge Accounting May 2019 - Present First Vice President - (Advanced Workshop) (2020) Department Head, - Ransomware (2020) Accounting Department, - Accounting for Derivatives and Hedge Accounting Financial Management Group (Basic Course) 2020 March 2018 - April 2019 First Vice President - Thai Financial Reporting Standards (TFRSs) and Financial Management Group Related Tax Laws (2020) - In-depth Analysis of Financial and Banking Business - Thanachart Bank PCL through Financial Statements (Intermediate Course) August 2016 - March 2018 Vice President, Performance (2020) Analysis and Reporting - Transfer Pricing and Documentation (2020) 2012 - July 2016 Vice President, Account - Business Strategic Plan (2020) Policy and Procedure - FMG’s Journey (Strategy Day) (2020) - Account Reconciliation Techniques for Validation (2020) - Krungthai Employee Engagement (2020) - Introduction to Financial Reporting Standards (TFRS 9) (2020) - Personal Data Protection Act, B.E. 2562 (Updated) (2020) - IFRS 9 Preparation for Executive (2019) - Creating Understanding for 2019 Draft TFRS 16 Lease (2019) - Annual Report (56-2) according to 2019 Integrated Reporting Concept Annual Report 2020 137

Report of the Independent Committee The Board of Directors has placed importance on the roles and responsibility of the Independent Directors as the essential part that constitutes the sufficient checks and balances on the structure and management of the Board of Directors. The structure of Krungthai Bank Board of Directors comprises 12 Directors namely, 1 Executive Director and 11 Non-Executive Directors. Among Non-Executive Directors, 6 are Independent Directors, which constitutes 50% of the total numbers of the Directors. Thus, it shaped the ratio of Independent Directors of the Bank to exceed the requirement from the Securities and Exchange Commission (SEC) stating that at least one third of the Board of Directors (33.33%) must be the Independent Directors and it must not be less than 3 Independent Directors. Each Independent Director is capable to provide opinion freely regardless of whether it is the controversy opinion or other observations on agenda items under consideration in the Board of Directors meeting with the intention to defend rights and protect benefits of minor shareholders and other stakeholders, as well as contributing to the implementation of good corporate governance of the Bank. The Bank’s Independent Directors originally has its directorship roles and responsibilities, in consequence; the Board of Directors has enhanced the duty and performance of the Independent Directors to work in a panel like other Bank’s Committees. Therefore, the Independent Director Committee Charter was established with the purpose to specify the Directors’ qualifications, term of office, including their roles and responsibilities. The Independent Director Committee agreed to conduct and disclose the report of the Independent Director Committee annually in the Annual Report of the Bank starting from 2018 onwards. The Independent Director Committee determined scope of matters to be presented as agenda in the Committee meeting as follows: • Duties of the Independent Director Committee in administrating and facilitating the minor shareholders • Providing suggestions and recommendations to the Management in an attempt to generate balance between the management, internal control and the compliance with laws, regulations and good corporate governance • Monitoring complaints relating to the Bank, particularly on the matters that affect the Management or Authorized Directors, either on the problematic issues or issues involving the unbalance between the emphasis on business operation and the lack of measures in compliance or good internal control • Handling issues involving all parties of stakeholders As at 31 December 2020, the members of the Independent Director Committee are as follows: 1) Gen. Tienchai Rubporn Chairman 2) Prof. Dr. Kittipong Kittayarak Independent Director 3) Mr. Thanwa Laohasiriwong Independent Director 4) Mr. Vichai Assarasakorn Independent Director 5) Mrs. Nitima Thepvanangkul Independent Director 6) Mr. Teerapong Wongsiwawilas Independent Director Ms. Sineenard Damri-anant Assistant Secretary 138

In 2020, the Independent Director Committee held 4 meetings and reported the minutes of the meeting to the Board of Directors on the quarterly basis. The significant details are summarized as follows: 1. The Independent Director Committee agreed that the Committee meetings can be held via electronic media in case of necessity, for instance, during the pandemic of coronavirus disease 2019 (COVID-19) and/or in other necessary cases. 2. The Independent Director Committee acknowledged the report of the shareholders’ satisfaction survey of the 27th Annual General Meeting of Shareholders (2020). The Committee suggested that in case the Bank has taken any actions corresponding to shareholders’ questions and suggestions proposed in the Annual General Meeting, the Management should monitor the progress of such actions and report to the Independent Committee. 3. The Independent Committee expressed concern and urged the Bank to comply with the principles of good corporate governance and not limit the rights of minor shareholders. Facilitation of the meeting in person or by proxy and inquiry about the agenda should be provided. 4. The Independent Committee agreed upon the principle of providing the shareholders the chance to propose agenda in the meeting and nominate the qualified candidates to be appointed as the Directors in the 28th Annual General Meeting of Shareholders (2021). Accordingly, this shall be proposed to the Board of Directors for approval. 5. The meeting schedule of the Independent Director Committee for the year 2021 has been set in advance, which is on the quarterly basis - the fourth Wednesday of March, June, September and December. In case that the Independent Director has any urgent or extraordinary agenda to consider under the duties of the Independent Director Committee, the additional meeting shall be held apart from ordinary schedule. However, in case it is necessary to change the meeting schedule, the appropriate discussion shall be held and all Independent Directors shall be informed on a case-by-case basis. 6. The Independent Committee considered and agreed to nominate 2 Independent Directors with their profiles to be appointed as proxies for the shareholders in the 28th Annual General Meeting of Shareholders (2021). 7. The performance evaluation of the Independent Director Committee for 2020 was conducted. Divided into 2 types of evaluation – the Committee evaluation (group evaluation) and the Director individual evaluation (self-evaluation), the evaluation results of both types in 2020 showed the overall rating at “excellent” level. In this regard, the evaluation report shall be proposed to the Board of Directors for acknowledgement subsequently.

(Gen. Tienchai Rubporn) Chairman of the Independent Committee Annual Report 2020 139

Report of the Corporate Governance and Social Responsibility Committee

Krungthai Bank realized the importance of corporate governance (CG) and social responsibility with awareness of creating shared value (CSV) in order to achieve sustainable development for all stakeholders of the Bank under the ESG - Environment, Social and Governance - principles and in accordance with the “Growing Together” vision. In this regard, the Bank’s Board of Directors appointed the Corporate Governance and Social Responsibility Committee consisting of 4 Directors to determine schemes and monitor the CG and CSR operating result. In 2020, the Committee held 12 meetings in total.

Complying with the 2017 - 2021 corporate governance strategies of Krungthai Bank PCL, the Corporate Governance and Social Responsibility Committee determined 2020 CG strategies to execute under the Sustainable Krungthai Initiative through implementing the 3 principles - Foster, Prevent and Change. With the objective to become a moral organization, the Committee has sorted out the desirable behaviors and cultivated the moral identity of Krungthai Bank comprising 5 features - Creativity, Achievement, Honesty, Teamwork, and Sociability. Henceforth, these moral identities shall be designated as the Core Value of the Bank for guiding principles on business operation. Attributable to the deliberate operation in 2020, the Bank received the awards relating to the corporate governance and social responsibility as follows:

Outstanding State-Owned Enterprise (SOE) Awards 2020 in recognition of the Outstanding SOE Committee, the Outstanding Organization Management and the Outstanding COVID-19 Crisis Management from the State Enterprise Policy Office (SEPO), Ministry of Finance Bank of the Year 2020 in Thailand from the Banker magazine Financier of the Year 2020 from the Money & Banking Awards 2020 organized by the Money & Banking magazine Achieving Excellent CG score in the Corporate Governance Report of Thai Listed Companies (CGR) 2020 organized by Thai Institute of Directors Association (IOD) The Asian Banker Leadership Achievement Award for the Best Managed Bank during COVID-19 in Thailand and the Asian Banker Leadership Achievement Award for the Best CEO Response to COVID-19 in Thailand from the Asian Banker Thailand Digital Excellence Awards 2020 in category of Thai Digital Champion for Tech Innovation & AI from Thailand Management Association (TMA) Thailand Sustainability Investment (THSI) Award 2020 from the Stock Exchange of Thailand (SET) Sustainability Disclosure Award 2020 from Thaipat Institute

All the rewards and assessments the Bank received have reflected the effectiveness of good operation that the Bank has continually adhered to and we ensure to keep up to the professional standard straight on.

(Professor Dr. Kittipong Kittayarak) Chairman of the Corporate Governance and Social Responsibility Committee 140

Report of the Nomination and Remuneration Committee The Nomination and Remuneration Committee consists of three directors – two independent directors and one non-executive director. Mr. Thanwa Laohasiriwong is the Chairman of the Nomination and Remuneration Committee. Ms. Patricia Mongkhonvanit and Mr. Teerapong Wongsiwawilas are the members of the Committee. The Committee plays the crucial roles to support the Board of Directors and the Bank. In 2020, the Nomination and Remuneration Committee held 20 meetings. The Committee has carefully, cautiously and transparently adhered to the charter of the Nomination and Remuneration Committee for the utmost benefits for the Bank and its stakeholders. Additionally, the Committee has scrutinized and provided suggestions in certain significant issues before proposing to the Board of Directors. Details are as follows: 1. Reviewed and set policies, criteria and procedures concerning the nomination of the Directors, Top Executives and Authorized Bank Executives. The purpose is to establish the reference guideline for recruiting the appropriate candidates whose qualifications are conforming to the vision and business strategy of the Bank. 2. Considered recruiting and nominated qualified persons to be appointed as Directors of the Bank from various sources of information. Each candidate must have appropriate qualifications as specified by relevant laws and regulations, the Bank’s rules and good corporate governance policy. The Committee shall appraise candidates based on the required skills and knowledge from the Skill Matrix of the Bank and take into consideration the Director’s Pool from the Ministry of Finance and Thai Institute of Directors (IOD). The qualified candidates’ profiles shall be verified in order to prevent conflict of interest. The Committee’s consideration shall be based on the suitability of organization’s size and structure. After the related regulators’ approval, the Committee proposed the qualified candidates to the Board of Directors and/or the shareholders for approval. 3. Considered recruiting and nominated persons to be appointed and rotated to the position of Top Executives and Authorized Bank Executives. The Committee’s consideration for each candidate shall be based on their knowledge, competence, leadership experience and proficiency in the position. The Committee also put emphasis on the Executives’ rotation across different Group in an attempt to continually enhance their potential, skills and self-development through working in diverse fields. After the selection, the Committee proposed the qualified candidates to the Board of Directors and/or submitted to the related regulators for approval. 4. Considered and approved the succession plan and management process of Group Heads (N-1) and Sector Heads (N-2) of the Bank to ensure management continuity. 5. Considered and specified the performance evaluation guidelines for the Board of Directors, Sub-Committee Directors, the President and the Authorized Bank Executives to comply with good corporate governance as well as outstandingly reflecting the Director’s performance. 6. Set the criteria and determined the remuneration of the Board of Directors and Sub-Committee Directors according to the rules and related regulations before proposing for approval from the Board of Directors and shareholders in the Annual Ordinary General Meeting. The remuneration of Directors of the subsidiaries shall be according to the remuneration of the Bank’s Directors and corresponding to the assigned duties and responsibilities. 7. Set the criteria and determined the remuneration of the Top Executives and Authorized Bank Executives before proposing to the Board of Directors for approval. The remuneration has been determined in consideration of the individual’s duties and performance, the Bank’s performance, the comparison with benchmarking banks as well as the compliance with good corporate governance. 8. Set the criteria and determined the remuneration for Directors of the Bank’s subsidiaries before proposing to the Board of Directors for approval. The remuneration has been determined in consideration of the types of business and the performance of the companies in order to be in line with the Bank’s direction. 9. Considered and provided suggestion for greater effectiveness in human resource management with the purpose to generate the utmost benefit to the Bank’s business in the following issues: 9.1 Remuneration structure of the Bank 9.2 Guidelines and strategies for human resource development amongst the challenges 9.3 Management guidelines for high potential and substandard employees of the Bank 9.4 Transfer guidelines of executives and employees (in case of secondment) Furthermore, the policy and details of the recruitment process along with the remuneration policy, all types of remuneration and the remuneration report have been disclosed in the Bank’s Annual Report respectively.

(Mr. Thanwa Laohasiriwong) Chairman of the Nomination and Remuneration Committee Annual Report 2020 141

Corporate Governance

The Bank has stipulated the Corporate Governance 1. Corporate Governance Policy policy and guideline in conformity with the principles of corporate 1.1 Corporate Governance Krungthai Bank is aware and determined to operate governance of the Stock Exchange of Thailand as follows: its business with transparency, integrity and fairness in compliance 1) Creation of Long Term Value: with good corporate governance principles in order to become 2) Accountability: an efficient organization that excels in operating its business on 3) Responsibility: the basis of ethical responsibility and takes into account the benefits 4) Promotion of Best Practices: of all stakeholders. Such operations shall establish confidence and 5) Equitable Treatment: generate benefits to the shareholders, who make important 6) Transparency: contributions to the Bank’s sustainable growth and prosperity. 7) Social and Environmental Awareness: The Board of Directors placed importance on good The Bank has communicated and publicized the seven corporate governance over the past several years as the Bank principles of good corporate governance to employees of has been earnestly operating with good corporate governance; all levels via the Bank’s communication channels and assigned encouraging the members of the Board of Directors, managements all business units of the Bank to adopt these CG principles. With this and employees of all levels to adhere to good corporate regard, the Bank shall ensure that all the operation has been governance principles and taking part in activities leading the carried out in line with good corporate governance. All Directors Bank to become the organization with CG in process, as well as are aware of performing their duty to create utmost benefit to elevating the Bank’s compliance to meet international standards. the Bank and continually undertake activities relating to social Moreover, the Board of Directors has entrusted responsibility, generating substantial results and truly benefiting the Corporate Governance and Social Responsibility Committee to the society and environment. The Bank develops effective social formulate the action plans and measures to ensure the execution and environmental projects by integrating and arranging such of the corporate governance policy. The Committee assesses activities continuously under the concept of instilling intellectual the implementation of the policy, adjusts and updates policy capital. Most importantly, the Bank also encouraged the society, regularly for continual relevancy along with monitors and revises community and other stakeholders to take part in the Bank’s CG guideline practices to comply with both domestic and activities, to encourage them to care for each other and overseas good corporate governance guidelines in order to be generous toward the unfortunates, as well as putting emphasis meet international standards. on environmental issues that are becoming more critical. 142

In 2020, the Bank continued to promote good corporate communicated to executives of the Bank and companies in governance through various means including: its financial conglomerate. The event was attended by the members 1. Reviewing corporate governance strategy for 2017 - of the Board of Directors, the Bank’s executives, executives of 2021 of Krung Thai Bank Pcl. with the intention to elevate the companies in its financial conglomerate and the Bank’s the Bank’s operation to be in line with Thailand’s Master Plan network. on national anti-corruption phase 3 (2017 - 2021) and the Bank’s 6. Determining 5 moral identities - “Creativity, strategy plan focusing on becoming a prototypical bank in term Achievement, Honesty, Teamwork, Sociability” and indicating of morality and ethics and creating zero-tolerance culture, the desirable behaviors of executives and employees to be the Bank’s corporate governance strategy for 2017 - 2021, comprising in accordance with moral identity and encourage all executives of 5 main strategies as follows: and employees to announce their will and commit to behaving 1st Strategy: with morality, ethics, rules, laws, official rules. Executives and Creating zero-tolerance organization employees are persuaded to take into account their knowledge, 2nd Strategy: skills, creativity, shared experiences, in the development of work, Elevate the moral intention to combat corruption products or services of the Bank. In addition, by determining 3rd Strategy: the 5 moral identities, the Bank wishes to create employee’s Develop proactive corruption prevention systems participation in driving operations in all dimensions and motivate 4th Strategy: the employees to formulate a sustainability plan to close the gap Elevate the standard of corruption suppression process of pain points and create a corporate culture. 5th Strategy: 7. Driving activities/projects under the Krungthai Moral Improve the Bank’s score on Integrity and Transparency Initiative (ongoing) consisting of 1) QA (1 Unit, 1 Sustainability Assessment: ITA Plan) under the Zero Tolerance framework / Market Conduct / 2. Integrating corporate governance principles in their Risk Management / Traditional and Digital Service + X2G2X work process (KTB CG in Process) by improving the 2020 CG 2) KRUNGTHAI COMPLIANCE CHAMPION Project 3) Krungthai Loves operation to correspond with the State Enterprise’s Integrity and Communities Project Transparency Assessment: ITA. 8. The Bank enhances the expansion and development 3. The Krungthai Moral Initiative (Sustainable Krungthai of plans to generate ideas and create innovations through Initiative) has been conducted since 2017. In 2020, the Bank the Krungthai Hackathon program that provides the opportunity drove the Krungthai Moral Initiative continuously by operating for all employees to take part in the rectification, creation, its business aiming for transparency and sustainability (Sustainable Krungthai) in line with the international standards. The Bank adhered to the principle of ESG - environmental, social and Moral Identities governance to drive the Bank to become a financial institution that grows side-by-side with Thai people and ready to provide financial services to people at all levels thoroughly and equally. The Bank also aimed to reduce social inequality, promote strong economic growth and be a pillar of the nation’s economy. Creativity Regarding the COVID-19 outbreak, the Bank participated in the government’s assistance measures through the 3 principles - Foster, Prevent and Change that focuses on generating results in 1) financial growth, 2) stakeholders confidence, 3) transparent Honesty process and 4) employees satisfaction. Besides, the Bank raised employees’ consciousness in performing quality work with virtue, aiming to embed as the DNA of employees and leading to a zero-tolerance culture. Achievement 4. Declaring its “intention to manage and operate business with moral in order to become a zero-tolerance organization”, as well as having policy communications by the Chairman of the Board of Directors, the President and Chairman Teamwork of the Corporate Governance and Social Responsibility Committee in various ways. 5. Organizing the Krungthai Strategy Seminar Day Sociability 2020 to promote the establishment and improvement of moral standards and foster good corporate governance and zero tolerance culture in the organization. The policy was Annual Report 2020 143

development, innovation and enhancement of the sustainable, understanding and awareness of the importance of working innovative and virtuous organization. ethics for executives and employees from actual events and 9. The Bank has enhanced its sustainability plan by case studies that are important and useful to work. implementing a project to improve credit processes so as to 14. The Bank in the collaboration with the Krungthai Bank increase productivity and efficiency. Through the Design Thinking State Enterprise Labour Union provided a lecture on the “Roles of the method, the Bank aims to encourage its employees to change Executives in Supervision of the Employees Discipline” course and their mindset in solving problems, including creating collaboration “Discipline Recognition, Risk Reduction and Non-compliance between the relevant business units. Prevention” course for executives and employees throughout 10. The Bank extended the knowledge management the organization. process by passing on knowledge and experience arising from 15. Appraising work performance in alignment with the implementation of the Krungthai Moral Initiative (Sustainable corporate governance principles of the affiliates in which Krungthai Initiative). In this regard, the Bank appoints KM agents the Bank holds 100% of share. and KM gurus of the Bank in an attempt to establish a culture 16. Publication of articles and news relating to corporate of learning organization. governance on the Bank’s website and intranet homepage and 11. The Bank enhances its human resource management sending directly in the employee’s mailbox. process by establishing a strategic human resource management 17. Participating with external organizations in promoting plan in accordance with the Bank’s strategic plan, drives Krungthai and developing the Best Practice guidelines as well as building Moral Initiative Project, including creating corporate culture up the cooperation among State Enterprise’s network and other according to 5 moral identities - “Creativity, Achievement, organizations. Honesty, Teamwork, Sociability”. 18. Developing and improving the operational process 12. The Bank initiated One Krungthai application to to be in line with the international anti-corruption standards. promote the creation of culture innovation, knowledge The Bank was certified for a membership renewal of the Thailand’s management, and 5 moral identities - “Creativity, Achievement, Private Sector Collective Action Coalition Against Corruption Honesty, Teamwork, Sociability.”. The application allows (CAC) by the Thailand’s Private Sector Collective Action Coalition employees to access at anytime and anywhere via mobile Against Corruption Project. phone. 13. The Bank provided the e-learning course “Lesson 1.2 Corporate Governance Policy Learn for Sustainable Krungthai” to reinforce knowledge, create The Board of Directors approved the establishment of the policy for the Bank to conduct its business in compliance with the law and corporate governance principles by considering transparency, fairness and responsibility of all stakeholder groups as well as adhering to the code of conduct and the good corporate governance in order to create an important foundation for sustainable and stable business operation. The Board of Directors approved the establishment of the written corporate governance policy in order that the Board of Directors, executives and employees at all levels can comply. The Bank has published its corporate governance policy both in Thai and in English which can be downloaded from the Bank’s website. The Corporate Governance Policy of Krungthai Bank was established and first announced in 2002. There has been continuous improvement to elevate the corporate governance standard of the Bank by adhering to corporate governance guidelines which are internationally accepted both domestic and abroad such as the Principles of Good Corporate Governance of the Organization for Economic and Co-operation Development (OECD), the Principles of Good Corporate Governance for Listed Companies, Corporate Governance Code (CG Code) of the Securities and Exchange Commission, Thai Institute of Directors, etc. The Bank complied with the Apply or Explain principles by conforming to the guidelines as appropriate to the management of laws and regulations related to the business operation of the Bank. 144

The Board of Directors, executives and employees at 2.2 Sub-Committee of the Management all levels have acknowledged and complied with the Corporate Department Governance Policy, leading to the organization with a corporate • Management Committee governance culture that can raise trust from shareholders and Management Committee has duties to formulate all stakeholders for establishing benefit and sustainable growth the Bank’s policy and strategic plan; supervises operation in of the Bank. accordance with policies established by the Board of Directors and the Board of Executive Directors and / or the President; 2. Sub-Committee monitor new product approval result of Product Committee; track 2.1 Structure of the sub-committee and review the operation to be in line with the Bank’s policy As at December 31, 2020, the structure of the Board of and strategic plan and approves any matter as stated in Directors comprises of seven sub-committees as follows: the regulations/ the Bank’s notifications. The meeting of 1. The Board of Executive Directors the Management Committee is organized twice a month or 2. The Audit Committee as appropriate. 3. The Nominating and Remuneration Committee • Assets and Liabilities Management Committee 4. The Corporate Governance and Social Responsibility (ALCO) Committee The Committee formulates a framework for managing 5. The Risk Oversight Committee the Bank’s assets, liabilities and capital funds in line with external 6. The Compliance Committee factors affecting liquidity and profitability by implementing 7. The Independent Director Committee appropriate analysis tools to determine interest rate, and benefit Names of Directors, scope of duties and responsibilities returns from loans and deposits. The Committee also recommends of each committee, including names of Audit Directors with appropriate strategies in investment, which are related with experience in auditing financial statements are prescribed in liquidity management of the Bank. the Management Structure topic on page 86. Annual Report 2020 145

Assets and Liabilities Management Committee 3. Nomination and Appointment of Directors comprises the President and the different Group Heads, namely and Executives Government and State Enterprise Relations Group, Global 3.1 Recruiting Procedures Transaction Banking Group, Risk Management Group, Corporate 3.1.1 Directors Banking Group 2, Retail Banking Product and Strategy Group, Process of Nomination and Appointment of Directors Business Center Group, Global Markets Group and Financial 1. The Nomination and Remuneration Committee has Management Group. The meeting of the ALCO is organized duties to recruit and nominate qualified candidates from various at least once a month to consider the impact on assets and liabilities sources, including from the Director Pool, to be appointed as new from market changes and to consider the Bank’s funding sources Director. The eligible candidate must not have prohibited under current and future liquidity, including risk management on characteristics according to the relevant laws and regulations, interest rate. The Department Head of the Asset and Liability regulations of the Bank and charter of the Board of Directors. Management Department is responsible for compiling and Apart from considering the Board of Directors structure in terms of presenting information as supportive details to the Asset and the proportion and appropriateness in many fields, the Bank also Liability Management Committee for approval. took into account the policy in terms of the Directors diversity. In • Group Credit Committee Level 7 detail, the Board of Directors must possess diversified qualifications, Group Credit Committee (GCC) level 7 is authorized consist of knowledge, skill matrix and experience in line with the to approve lending limits and debt restructuring as stipulated Bank’s missions and strategies, both at the present and in the future. in the Bank’s notification on credit approval and debt restructuring. Inclusively, the recruitment also concerns the sustainable Additionally, the Committee is authorized to approve acceptance development of the Bank, which complies with legal requirements, of collateral transfer as specified by the Bank. The meeting of Bank’s regulations and good corporate governance principles. the GCC is organized at least once a week. In the case of recruiting persons to replace the • Credit Scrutiny Committee directors who expired from term of office. The Nomination and The Credit Scrutiny Committee has duties to consider Remuneration Committee shall consider candidates (if any) by and scrutinize works under the authority of the Board of Directors allowing minority shareholders to nominate persons for and the Board of Executive Directors which are scrutinizing credit consideration and appointment as directors in advance for the approvals and debt restructuring as determined by the Bank, Annual General Meeting of shareholders or considering the past trading of non-performing assets as well as underwriting performance for re-election to hold directorship positions. the selling and/or investment in debt instruments except the debt Policy of Director Nomination instruments issued by government, the Bank of Thailand or other The Nomination Committee shall consider government agencies guaranteed by the Ministry of Finance. the qualifications of the Bank’s Directors as follows: Moreover, the Committee also considers and approves credit - Must possess director qualifications as specified limits, debt restructuring and credit transactions as specified by in the Public Limited Companies Act, Financial Institutions the Bank as well as performing other duties assigned by the Board Businesses Act, Standard Qualifications of Directors and State of Directors, the Board of Executive Directors and the President. Enterprise Employees Act, Securities and Exchange Act, Royal The meeting of the Committee is organized at least once Decree Regulating on Electronic Payment Services, laws and a week. regulations of the regulatory agencies related to the business • IT Steering Committee operation and regulations of the Bank as well as no unreliable IT Steering Committee has duties to control and characteristic according to the notification of the Securities and supervise the Bank’s operation to be in compliance with laws and Exchange Commission, Thailand. regulations related to electronic transactions and information, - Have knowledge and expertise according to considers and scrutinizes information technology plans of the Bank the skill matrix specified by the Bank, and in compliance with missions as well as the operation plans of each project to be accurate and and strategies of the Bank. Hence, the Board of Directors shall continuous for customers. The Committee also considers and comprise of persons with different qualifications such as skills, scrutinizes channels of fraud through information system as well as experiences and useful specific abilities as well as comprising of prevention guidelines of the threats that may occur from the use at least one person with knowledge or experience related to of information technology, which may affect the business operation commercial banking business, at least one person with knowledge of the Bank. or experience related to accounting and at least one person • Subsidiary Management Committee with knowledge or experience related to information technology. The Subsidiary Management Committee has - Able to perform duties and independently express an authority to consider the operation guidelines for the subsidiaries their opinions as well as dedicating time for duties sufficiently. to ensure that it is in alignment with the Bank’s objectives and - Holding positions in other companies strategies. The Committee also establishes relevant regulations Holding director position in state enterprises and corporate governance guidelines in order to be in line with including Krungthai Bank Public Company Limited, not more than the corporate governance regulations of the companies invested three state enterprises. by the Banks. Initially, the meeting frequency is set to once per quarter. 146

Holding director position in listed companies both the Bank complies with the process of nomination and appointment domestic and abroad, not more than 5 companies (including of Independent Directors correctly and completely. On December Krungthai Bank Public Company Limited but excluding companies 31, 2020, the Bank had 6 Independent Directors from the total from debt restructuring). number of 12 directors. It is calculated as 50 percent of the Board 2. The Nomination and Remuneration Committee of Directors. All Independent Directors are qualified, knowledgeable proposes the name list of the nominated persons and opinion people, capable and experienced which are beneficial to to the Board of Directors. the business of the Bank. All Independent Directors perform their 3. The Board of Directors approve the proposal of duties with responsibilities, cautious, honesty as well as the names of the nominated persons for requesting an approval in compliance with laws, objectives, regulations of the Bank and of the appointment of directors from the related regulatory the meeting resolution. Moreover, Independent Directors agencies. independently perform their duties. Their work process 4. The Board of Directors proceeds on a case-by-case is independent from the Management Department and major basis as follows: shareholders of the Bank. Independent Directors supervise 4.1 In the case of the appointment of directors appropriate benefits integration of stakeholders within the business to replace the directors retiring after completing the term of operations of the Bank as well as making sure that there is office no Independent Director holding the position in the Bank’s parent The Board of Directors proposes a candidate company, subsidiary and subsidiary in the equal level. to the shareholders meeting. The directors who are retired by completing the term of office may be re-elected. Rules and Process of Nomination and Appointment of procedures for election of directors are as follows: Independent Directors - One shareholder has votes equal to one The process of nomination and appointment of share per one vote. Independent Directors is the same as the process of nomination - In voting for election of directors, and appointment of other directors. Besides director qualifications, shareholders vote for each director separately. Each shareholder Independent Directors must possess complete qualifications will use all of the votes he has to elect one person or many in compliance with the Bank’s definition of independent director persons as directors but cannot divide the votes for a specific as follows: person with more or less votes. - Persons who receive the highest votes in Definition of Independent Director descending order are elected as directors, equal to the number Independent director must not have any business of directors that should be or should be elected at that time. or work related to commercial bank that might have an impact In the event that the person elected in descending order, has equal on his/her independent decision-making and must have votes and exceeds the number of Directors that should be additional qualifications which are considered to be more nominated at that time, the Chairman of the meeting will give intensive than the Capital Market Supervisory Board’s regulations a casting vote for a final result. For nominating a person to be in terms of (a) shareholding and (b) formal relationship regarding appointed as a Director, it must be approved by the Bank of the participation in management. Thailand before presenting to the shareholders’ meeting. (a) An independent director holds no more than 4.2 In case of nomination of directors to replace 0.5 percent of all shares with voting rights of the Bank, the parent vacancies in other cases which are not the cases of 4.1 company, a subsidiary, an associated company, a major The Board of Directors (number of votes must shareholder or an entity with controlling authority of the Bank. not less than 3 of 4 of remaining Directors) appoint a person This is inclusive of shares held by anyone who is affiliated with to be a director as well as holding the position for the remaining such independent director. term of the director he replaces. (b) An independent director is not being or having 5. Internal departments of the Bank register the been a director which is not an independent director, employees, change of directors with the Ministry of Commerce as well as staff, consultant with monthly salary or entity with controlling reporting to the relevant departments within specified time. After authority over the Bank, the parent Company, a subsidiary, all this time, the Bank complies with the process of nomination an associated company, a major shareholder or an entity with and appointment of directors correctly and completely. controlling authority of the Bank, unless such person has resigned 3.1.2 Independent Directors from such positions for at least two years. Such prohibitions shall The Board of Directors nominated the Independent not apply to an independent director who has been a government Directors with prudence and transparency. After all this time, officer or an advisor of a government authority that is the major shareholder or a regulator of the Bank. Annual Report 2020 147

(c) An independent director has no connection by shareholder, controlling person or partner of the said professional blood or legal registration as father, mother, spouse, sibling, service provider unless the foregoing status has ended no less son/daughter or spouse of son/daughter of another director. Further, than 2 years. an independent director has no such connection with (g) An independent director is not being a director an executive, a major shareholder, and an entity with controlling appointed as a representative of the Bank’s director, major authority or an individual who will be nominated as director, shareholder, or shareholder related to major shareholder. executive or entity with controlling authority over the Bank or (h) An independent director is not undertaking the subsidiary. a business of the same nature and in competition with the Bank (d) An independent director has no business or a subsidiary company, or not being a significant partner of relationship with the Bank, the parent company, a subsidiary, a partnership, or executive director, employee, staff, advisor with an associated company, a major shareholder or an entity with monthly salary, or hold shares exceeding 1 percent of the total controlling authority of the Bank in such a manner that may number of shares with voting rights of any other companies obstruct their exercise of independent discretion. Further, operating the business of the same nature and in competition an independent director is not a significant shareholder or an entity with the Bank or a subsidiary company. with controlling authority over a party with business relationship (i) An independent director does not have any with the Bank, the parent company, a subsidiary, an associated other characteristics that prohibit the expression of independent company, a major shareholder or an entity with controlling opinion towards the Bank’s business operation. authority of the Bank, unless having been free from (j) An independent director must be a person who the aforementioned nature for not less than two years. has passed the nomination process of the Board of Directors Such business relationship is inclusive of a trading or the Nomination and Remuneration Committee. transaction occurring on a conventional basis or the conduct of After being appointed as Independent Directors business; a rent or lease of property; a transaction involving assets with the characteristics under paragraph one (a) to (j), they may or services; a provision or an acceptance of financial assistance be assigned by the Board of Directors to make collective decisions through means of a loan, a guarantee, a use of an asset involving the business of the Bank, the parent company, as collateral against debt; and, other similar actions which result a subsidiary, an associated company, a subsidiary of equal level, in the Bank or the party to the contract having a debt to be repaid a major shareholder or an entity with controlling authority, which to another party for the amount from 3 percent of net tangible can be decided in the form of a collective decision. assets (NTA) of the Bank or from 20 Million Baht, whichever Furthermore, when the Capital Market Supervisory is lower. The value of the business relationship shall be determined Board/the Securities and Exchange Commission announces using the calculation method for determining the value of any improvement/relaxation of the qualifications of Independent connected transactions under the Notification of the Capital Director, it will then be applied afterward. Market Supervisory Board governing rules on connected In case the person who is nominated to be transactions mutatis mutandis. The value of obligation shall include an Independent Director, is the person who has / has had a business any obligations occurred during the period of 1 year preceding relationship or professional service exceeding the value specified the date of the business relationship with the same entity in the definition of Independent Director, the Bank will arrange or person. for the Board of Directors’ opinion which is considered (e) An independent director is neither being nor used in compliance with the principle in section 89/7 of Securities and to be an auditor of the Bank, the parent company, a subsidiary, Exchange Act, B.E.2535 and the additional revision stated that an associated company, a major shareholder or an entity with controlling the appointment will not interfere with the exercise of independent authority of the Bank, and not being a significant shareholder, controlling judgment in the Independent Directors’ responsibilities. The Bank person, or partner of an audit firm which employs auditors of the Bank, shall disclose the following information in the invitation letter of the parent company, a subsidiary, an associated company, a major shareholders’ meeting in the period of appointing Independent shareholder or an entity with controlling authority of the Bank unless Directors. the foregoing status has ended no less than 2 years. - Manner of business relationship or professional (f) An independent director is neither being nor service causing the said person not being qualified under used to be a professional service provider, including legal advisor the prescribed criteria. or financial advisor who receives service fee exceeding Baht - Reason and necessity to maintain or to appoint 2 million from the Bank, the parent company, a subsidiary, an the said person as the Independent Director. associated company, a major shareholder or an entity with - Opinion of the Board of Directors to nominate controlling authority of the Bank, and not being a significant the said person as the Independent Director. 148

Business Relationship of Independent Directors discrimination. The President, Human Resources and According to the Notification of the Capital Market Corporate Governance Group and relevant Groups consider Supervisory Board Tor Chor. 39/2559, subject: Application for and and recruit internal persons who have knowledge, skills and Approval of Offer for Sale of Newly Issued Shares, the Bank experiences regarding the work in the responsibility of that discloses relevant information concerning the business relationship Group from the Successor Pool. Such persons shall receive of Independent Directors in an amount from three percent of the opportunity of job rotation for learning new tasks, building the net tangible assets of the Bank or from twenty million Baht potential as well as continual self-improvement, which is and above, whichever is lower. The Bank uses the criteria of beneficial to the Bank’s business operations and effective value twenty million Baht and above. Details are as follows: management. If no one is considered suitable for the job, There were 4 Independent Directors as at December outsiders with knowledge, expertise, skills, experience, 31, 2020 namely: leadership as well as vision and good attitude toward the 1. Mr. Vichai Assarasakorn took the position of organization will be recruited and proposed to Independent Director and member of the Audit Committee in the Nomination and Remuneration Committee and the Board Asian Sea Corporation PLC., Director in the Panel Plus Co., Ltd. of Directors for approval. and Director in the in Panel Plus MDF Co., Ltd. 2. Professor Dr. Kittipong Kittayarak took the position 4. Supervisory of Subsidiaries and of Independent Director and the Chairman of the Audit Associated Companies Committee in PTT PLC. and Independent Director in Dusit Thani 4.1 Policy on Supervisory of Subsidiaries and PLC. Associate Companies 3. Mr. Thanwa Laohasiriwong took the position of The Bank authorizes its executives to be directors of Independent Director and Chairman of Audit Committee in its subsidiaries for controlling, supervising, proceeding and TPBI PLC. collaborating with the Bank and other companies. The Bank 4. Mr.Teerapong Wongsiwawilas took the position requires its subsidiaries to prepare an annual business plan and of Independent Director and Audit Director in Bangchak annual budget, then proposes to the Bank for an approval. Corporation PCL. Moreover, the Bank determines the Key Performance Indicator The abovementioned 7 juristic persons are having of its subsidiaries in order that the corporate policies of business relationships with the Bank. The Bank grants credit its subsidiaries are in compliance with the Bank’s policies. The Bank lines and contingent liabilities in excess of twenty million also requires its subsidiaries to submit operating performance Baht, which is referred to as the normal business transactions reports regularly. In case that there is a significant change within in banking operations in general commercial conditions. the financial conglomerate, such change shall be approved Besides, such relationship does not obstruct the use of by the Bank before proceeding. discretion or affect the performance of duty and the independent opinion as well as being in compliance 4.2 Proceedings of Supervisory of Subsidiaries with the relevant regulations. and Associated Companies The Bank authorizes the Board of Directors of the Bank 3.2 Nomination of the President to appoint executives of the Bank to be directors of its subsidiaries, The Bank has a transparent process of nomination meanwhile the Board of Executives Directors appoint executives and selection without discrimination. Application of the Bank to be directors of its associated companies. The Bank announcements will be made for giving an opportunity determines regulations for exercise of voting rights of the to persons with knowledge, skills, vision and experiences shareholder meeting of its subsidiaries and associated companies in managing large organizations to apply for the President. that must be approved by the Board of Executives Directors. The Bank shall appoint the specific Committee for nominating Moreover, the Bank shall control and supervise the utilization and selecting the person with knowledge, skills and suitable of funds and business operations of its financial conglomerate experiences for the position, then determining by conducting its performance report and risk management report, then the appropriate remuneration before submitting the name of proposing to the Affiliate Management Committee to consider and such person to the Board of Director for consideration and provide opinions before proposing to the Risk Oversight Committee appointment of the President respectively. or the Executive Committee or any other committees as approved by the policy. 3.3 Nomination of the Group Head In addition, the Bank requires its financial conglomerate The Nomination and Remuneration Committee has to deliver quarterly financial information and related party transactions duties to recruit, select or screen nominated persons to the Bank for conducting consolidated financial transactions as well to consider and appoint to the position of a top executive as reporting the information of transactions within the financial and a person with power of management. The Bank holds conglomerate to the Bank every month in order that the Bank can a transparent process of nomination and selection without verify the accuracy of the information regularly. Annual Report 2020 149

The Bank requires a representative committee of In addition, for transparency and accountability, the Bank the financial conglomerate to propose for an approval in case of determined guidelines for executives to disclose their interest a significant change within the company such as capital increase, and relevant persons’ interest to the Board of Directors which capital reduction and large-scale investment which exceeds are in compliance with the regulations of relevant agencies half of the current total assets. For subsidiaries, the Bank requires such as the Bank of Thailand, the Securities and Exchange Commission, an approval from the Executive Committee, and for associated the Stock Exchange of Thailand, etc. As for Krung Thai Bank Pcl. companies, the Bank requires an approval from the President before shares trading, directors are required to inform a secretary of proceeding. the Board of Directors meanwhile the top executives are required The Bank has made an agreement with other shareholders to inform the Compliance Department at least 1 day prior to regarding joint venture management. The number of directors the trading day. depends on the ratio of shareholding. The number of independent directors is as determined by regulatory authorities of 6. Auditor’s Fee such companies. • Audit fee The Bank and its subsidiaries paid an audit fee to 5. Supervision of the Use of Insider the auditors of the Bank for the 2020 accounting period in the amount Information of 37,050,000 Baht. The Bank specified measures for the supervision of the use • Non-audit fee of insider information in the Corporate Governance Policy In the fiscal year 2020, the Bank and its subsidiaries paid as follows: compensation for other services: tax call consultants, financial 1. Employees are not allowed to trade, transfer in/out reporting standards (TFRS) consultants, Transform IT Governance securities in such a way that take advantages of outsiders projects, hiring of training services, hiring a consultant for the by using insider information which is a material of change in Financial Control Framework project which is paid during the price of securities that have not been disclosed to the public the fiscal year amounting to 13,566,000 baht and is the future or the Stock Exchange of Thailand and such employees perceives payables amounting to 2,990,000 Baht. the information by their positions that are able to know the facts or by being employees of the Bank whether the said act is done 7. Implementation of Good Corporate for the benefit of oneself or others or disclosing such insider Governance Code for Listed Companies 2017 information for others to do so in which they receive the benefit. In the 27/2017 (974) meeting on December 27, 2017, 2. The Board of Directors, the President, the Group Head the Board of Directors considered the CG Code with responsibility and incumbents of Department Head or equivalent or higher and prudence, giving an opinion that CG Code are beneficial within the Account or Finance Group, are responsible for reporting for the Board of Directors as a leader and the highest responsible changes in securities holding issued by the Bank of themselves, person of the organization, to adapt to the Bank’s business their spouses and their children who are underage, to the Securities context in order to create value for the organization sustainably. and Exchange Commission according to the regulations The Board of Director also reviewed the Bank’s operation determined by the Securities and Exchange Commission. complying to CG Code in each practice so as to ensure Moreover, the Board of Directors, the President and Group Heads the appropriateness of outcome. Furthermore, in order to develop are responsible for reporting securities holdings issued by operation in any aspect to be in compliance with CG Code the Bank of themselves, their spouses and their children who are appropriately and continually, the Board of Directors agreed to underage to the Board of Directors every month as well as consider and review the implementation of CG Code to be reporting their interest to the secretary of the company in order related to the Bank’s business context at least once a year. to report to the Chairman of the Board of Directors and The consideration from the Board was required to be recorded as the Chairman of the Board of Directors audit according to a part of the Board of Directors’ resolution. The application of the regulations of the Securities and Exchange Commission. Copies the CG Code is reviewed annually. In 2020, at the Board of Directors of such report shall be delivered to the Compliance Department Meeting No. 14/2020 (1039) on July 22, 2020, the CG Code was for compiling as a reference for proceedings according to reviewed and applied in accordance with the Bank’s business the regulations of the connected transaction thereafter. context, which has been considered by the Corporate 3. To supervise securities trading and prevent the use of Governance and Social Responsibility Committee with prudence insider information, time period is determined to limit trading of and responsibility. The meeting agreed to maintain an appropriate securities that are issued by the Bank as well as regularly informing policy for implementing the CG Code and the Bank’s existing regulations on prevention of the use of insider information to practice that complies with the current business context. the Board of Directors, employees and relevant persons via There are 3 guidelines as follows: channels of the Bank regularly. 150

CG Code Compliance Guideline Practices of the Bank • The Chairman of the Board of Directors should be • The Charter of the Board of Directors specifies the compositions an independent director. of the Board that the Chairman of the Board of Directors should • In case that the Chairman is not an independent director, be an independent director. In case that the Chairman is not the board should consider by: an independent director, the Board of Directors should ensure (1) having the board comprise a majority of independent the balance of power and authority between the Board and directors, or management by: (2) appointing a designated independent director to 1) having the board comprise a majority of independent participate in setting the board meeting agenda. directors, or 2) appointing a designated independent director to participate in setting the board meeting agenda. At present, the structure of the Board of Directors consists of 6 independent directors out of 12 independent directors or equal to 50 percent of the total number of the Board of Directors members. However, the Charter of Independent Director Committee stated that one of the responsibilities of the Independent Director is to propose the meeting agenda to the Chairman of the Board of Directors in case that there are important issues or issues that the Board of Directors should consider and they have not been included in the meeting agenda. • Although the Chairman of the Board of Directors is not the Independent Director, it does not affect his/her independent judgement because the Chairman is an outsider with knowledge, expertise and skills, as well as having been nominated by the Nomination and Remuneration Committee, who have specified a skill matrix in alignment with the Bank’s strategies. Moreover, the Bank manages the balance of power using the following principles: - The Bank has an adequate internal control system and transparent operation mechanism in balancing power and authority. - The Chairman is not an authorized director, not an executive director and does not hold the positions of a chairman or member in any of the Bank’s sub-committees. - There is an adequate check and balance process of the structure of the Board of Directors and the management. The Chairman of the Board of Directors must not be the same person as the President of the Bank from whose roles and responsibilities are different. The roles and responsibilities of the Chairman is to oversee and ensure the effective operation of both the Committees and the management to accomplish the Bank’s objectives and main goals. The roles and responsibilities of the President are to be the highest executive of the management and manage the Bank to be in line with the direction and policies determined by the Board of Directors. Annual Report 2020 151

CG Code Compliance Guideline Practices of the Bank CG Code Compliance Guideline Practices of the Bank • The Chairman of the Board of Directors should be • The Charter of the Board of Directors specifies the compositions • The Board of Directors has elevated the performance of the an independent director. of the Board that the Chairman of the Board of Directors should Independent Director by operating as a committee, similar to • In case that the Chairman is not an independent director, be an independent director. In case that the Chairman is not other sub-committees of the Bank. The Board also stipulates the the board should consider by: an independent director, the Board of Directors should ensure Charter of Independent Director Committee which determines (1) having the board comprise a majority of independent the balance of power and authority between the Board and the qualifications, term of office and responsibilities. Moreover, directors, or management by: one of the Independent Directors is appointed as the Chairman (2) appointing a designated independent director to 1) having the board comprise a majority of independent of the Independent Director Committee. participate in setting the board meeting agenda. directors, or 2) appointing a designated independent director to • The Board of Directors may acquire the help of external • The Charter of Independent Director is stated that one of participate in setting the board meeting agenda. consultants in establishing principles and giving the responsibilities of the Independent Directors is to conduct performance suggestions on issues relating to the performance evaluation; self-evaluation, cross-evaluation, and group evaluation At present, the structure of the Board of Directors consists of evaluation of the Board of Directors at least every three twice a year and take into account the results to develop work 6 independent directors out of 12 independent directors or equal years and disclose details about such proceedings operation and to consider the appropriateness of the Board of Directors’ to 50 percent of the total number of the Board of Directors members. in the annual report. composition. However, the Board of Directors could invite any person, However, the Charter of Independent Director Committee stated as it deems appropriate, to be a consultant to assist the Board determine that one of the responsibilities of the Independent Director is to propose directions and recommend issues in performance evaluation of the meeting agenda to the Chairman of the Board of Directors the Board with appropriate criteria and appropriate time period. Such proceedings must be disclosed in the annual report. in case that there are important issues or issues that the Board of Directors Presently, the Bank does not have external consultants to help should consider and they have not been included in the meeting determine guidelines and suggest issues for evaluating the Board’s agenda. performance since the Bank currently has an appropriate system for evaluating the performance of the Board of Directors. Details are • Although the Chairman of the Board of Directors is not as follows: the Independent Director, it does not affect his/her independent - Establishing criteria for evaluation in comparison with the principles/recommendations of regulators such as the Bank of Thailand, judgement because the Chairman is an outsider with knowledge, Capital Market Supervisory Board and the Stock Exchange of Thailand, expertise and skills, as well as having been nominated by as well as in line with those prescribed by the organizations that the Nomination and Remuneration Committee, who have specified oversee good corporate governance, such as the Thai Institute of a skill matrix in alignment with the Bank’s strategies. Moreover, Directors (IOD). the Bank manages the balance of power using the following principles: - There is a periodic review of the performance evaluation - The Bank has an adequate internal control system and as appropriate through the approval of the Nomination and Remuneration Committee. transparent operation mechanism in balancing power and - The details of the operation related to the performance authority. evaluation of the Board of Directors are disclosed in the annual report - The Chairman is not an authorized director, not every year. an executive director and does not hold the positions of a chairman or member in any of the Bank’s sub-committees. - There is an adequate check and balance process of 8. Corporate Governance Code Compliance Market Supervisory Board (CMSB) and the regulations of Corporate the structure of the Board of Directors and the management. in Other Aspects Governance Report of Thai Listed Companies 2019 organized The Chairman of the Board of Directors must not be the same person • The Report of Corporate Governance Code by the Thai Institute of Directors (IOD). For 2020, the Bank received as the President of the Bank from whose roles and responsibilities Compliance the overall assessment of the said project in the “excellent” level are different. The roles and responsibilities of the Chairman is to The Board of Directors has a policy for the Bank to operate with the implementation of Corporate Governance in 2020, oversee and ensure the effective operation of both the Committees its business correctly under the law and good ethics on a basis summarized as follows: of efficient, transparent and verifiable management system that 1. Rights of Shareholders and the management to accomplish the Bank’s objectives helps building trust and confidence among shareholders, investors, 1.1 Rights of Shareholders Protection Policy and main goals. The roles and responsibilities of the President are all stakeholders and relevant parties in order to drive the Bank The Bank has Rights of Shareholders Protection Policy to be the highest executive of the management and manage to reach the stability, worthy and sustainable growth. to encourage and facilitate all groups of shareholders, including the Bank to be in line with the direction and policies determined For Corporate Governance, the Bank complies with minority shareholders, institutional investors and foreign investors, by the Board of Directors. the Principles of Good Corporate Governance for Listed Companies so that they can exercise their rights to attend the shareholders’ 2012 suggested by the Stock Exchange of Thailand, along with meeting by not do anything in which is a violation or depriving the Principles of Good Corporate Governance for Listed the rights of shareholders whether it is a basic legal right or others. Companies 2017 (CG Code) recommended by the Capital Example of such basic legal rights are the right to trade and 152

transfer securities that they are holding; the right of shareholders of Thailand and the Bank’s website on March 26, 2020. When on profits as dividends according to the declaration of dividends the situation was continuously controlled and the government by the Bank done on the approval of shareholders; the right announced the measures to relax the enforcement of emergency to attend the shareholder’s meeting; the right to propose the agenda declarations, the Board of Directors set the date for the 27th for the shareholders meeting; the right to vote for an appointment Annual General Meeting of Shareholders (2020) on July 10, 2020 and determination of auditor’s remuneration; the right to make at 1:00 p.m. at Athenee Crystal Hall, 3rd floor, The Athenee decisions on important matters of the Bank through consideration Hotel, a Luxury Collection Hotel, Bangkok, 61 Wireless Road of the agenda of the shareholders’ meeting, e.g. approval of (Witthayu Rd),Lumpini, Pathumwan, Bangkok. The Bank attached important transactions affecting the direction of the Bank’s the map and travel information with the invitation letter of business operations, amendment of the memorandum of the meeting and distributed it to all shareholders who have a right association and the regulations of the Bank, etc. Moreover, to attend the meeting. the Bank follows good practices in protecting rights of shareholders Due to the COVID-19 epidemic, the Bank more than basic legal rights in other areas as well as refraining is aware of the safety and health of shareholders. Therefore, to be from actions that may limit shareholders’ opportunity to study responsible for the public, the measures and practices were set the information of the Bank. Shareholders have the right to receive in the 27th Annual General Meeting of Shareholders (2020), which financial and non-financial information and news of the Bank were sent together with the invitation letter. The Bank requested such as operation performance, management policies, analysis cooperation for shareholders and proxies to act and acknowledge of operation performance, credit rating results from various matters, for instance, the consideration of appointing proxies to institutions, research information and corporate social responsibility Independent Directors instead of attending the meeting in person activities including important information that the Bank to reduce the risk factors of the spread of the disease from has published via the Bank’s website that is convenient and easy the gathering of the crowd; undergoing through the screening to access. and temperature check before entering the meeting place; 1.2 Practices regarding to Rights of Shareholders conducting a self-screening form for meeting attendees based Protection on measures to prevent the spread of COVID-19; checking in-out 1.2.1 Shareholders Meeting via the Thai Chana platform, etc. The Board of Directors arranges shareholders 1.2.2 Meeting Invitations and Meeting meeting, which is an annual general meeting within 4 months Documents from the end of fiscal year of the Bank. Other shareholders At the meeting of the Board of Directors meetings are called extraordinary meetings. Extraordinary meeting no. 11/2019 (1036) on June 10, 2020, there was a resolution of shall be arranged at any time, as it deems appropriate or within the 27th Annual General Meeting date (2020). On the same day, 1 month from the day that the request was received from the Bank announced the aforementioned meeting resolution of the shareholders in accordance with the regulations prescribed the Board of Directors in Thai and in English with details related by law. Each shareholders meeting shall be arranged with date, to the meeting date, agenda of the shareholders’ meeting, time and location regarding to the convenience of shareholders opinions of the Board of Directors on each period and the record who will attend the meeting. The Board of Directors encourages date. Shareholders and investors are required to acknowledge the shareholders who are unable to attend the meeting to assign such details via electronic news system on the Stock Exchange proxy and employ proxy forms that allow the shareholders to of Thailand’s website and the Bank’s website 30 days in advance decide voting direction as well as nominating at least one before the date of the shareholders meeting. independent director as an alternative in proxies of shareholders. The Bank provides meeting invitation letter and The meetings are organized in accordance with laws and good meeting documents including Thai and English versions of annual corporate governance principles. Meanwhile, the preparation reports. In the invitation letter, the Bank specified the information of meeting minutes, all important information must be accurately relating to the meeting’s date, time, location and the agenda and completely recorded. In addition, the names of the directors items for either informing or approval. All agendas are clearly who attended the meeting and did not attend the meeting classified by specific issues. However, the agenda related to as well as the percentage of both cases were disclosed. the Directors nomination and remuneration in each term, the Bank In 2020, the Board of Directors arranged shall separate the topic, state the purpose, rationale and 1 shareholders meeting which was an annual general meeting the directors’ opinion as well as providing adequate supportive and there was no extraordinary meeting. The Board of Directors information attached with the invitation letter. For example, set the 27th annual general meeting (2020) to be held on April agenda about the approval of dividend payment, the Bank 9, 2020. Later, due to the spread of COVID-19 pandemic, shall provide beneficial information on the dividend policy, the Bank’s Board of Directors had a resolution to postpone the holding the proposed dividend rate with the reason and additional of the Annual General Meeting of Shareholders. The Bank data etc. Then for the election of Directors, the Bank presents communicated information to shareholders and investors via the information about name-surname, age, educational background electronic media system on the website of the Stock Exchange and work experience, the number of listed/non listed company Annual Report 2020 153

and other organizations of taking the directorship, criteria and shareholder to be a representative of the meeting to witness remuneration process, position of the directorship, etc. Hence, the vote counting as well. Moreover, the auditor of the Bank for the in case of nominating the existing director to hold the position year 2019, which is the Office of the Auditor General of Thailand, again, the information about attending the meeting in the past had attended the meeting to clarify and answer questions about year and the date of taking the position will be provided. As for the financial statements to the meeting. Inclusively. The auditor the agenda of directors’ remuneration, the Bank prepares the from EY Company Limited, which is nominated as the Auditor information about policy and criteria for setting the remuneration for the Year 2020 and the representative of the Rights Protection of directors in each position. All remuneration will be presented Volunteer Member Thai Investors Association also attended to the shareholders’ meeting for approval. There is information the meeting. The Chairman of the meeting informed the name of for the appointment of auditors and audit fees such as names the directors, subcommittee chairman, executives together with and details of the auditor, information that shows independence the aforementioned meeting attendees to the shareholders of the auditor, the proposed audit fees, etc. for acknowledgement before the meeting start In addition, as informed in the invitation letter, The Bank arranges the use of voting cards for the Bank encourages any shareholder, who wishes to inquire every meeting agenda by using the computer and QR Code or request for more information related to the agendas of system for registration and vote counting as well as presenting the meeting, to submit questions in advance via E-mail Address: the results in every meeting agenda in order to facilitate [email protected]. or contact the Office of the Board the meeting smoothly and effectively. The Chairman requested of Directors, Krung Thai Bank PCL., 13th Fl. Nana Nua Building, the Secretary to inform the meeting about the regulations related Tel: +662 208-4132, +662 208-4136, +662 208-4144, +662 208-4146. to the Annual Ordinary General Meeting and shareholders’ rights The Bank published the information of shareholders for convenience and decorum in the meeting as well as meeting’s invitation letter and meeting documents in both Thai the process to make inquiry or comments, procedures of voting and and English, which can be downloaded through the Bank’s vote counting. The meeting was run according to the set agendas website from June 19, 2020, which is 21 days prior to the meeting, without adding any agendas not mentioned in the invitation in order to provide the shareholders an opportunity with adequate letter. Additionally, in every agenda, the Chairman of the meeting time to acknowledge the meeting information before receiving gave opportunity and time for all shareholders to have equal such invitation letter in form of printing documents. For shareholders rights to examine the Bank’s operations, make inquiries, express meeting invitation letters distribution, the Bank assigned Thailand their opinions as well as suggestions independently in matters Securities Depository Co., Ltd. and the Bank’s share registrar as related to the agenda or about the Bank. Within the sufficient the operators to distribute meeting invitation letters to shareholders time and in accordance with the appropriate method for with a right to attend the meeting. The invitation letter is separately the situation of the COVID-19 outbreak, the time required for sent out according to languages, Thai version for Thai nationality the meeting was concise and efficient as notified to the meeting shareholders and English version for foreign shareholders. prior to the commencement of the meeting agenda. The Bank The delivery had been made through Thailand Post on July 2, 2020, answered questions to the shareholders after considering which is 8 days prior to the meeting day. Furthermore, the Bank the specified agenda and on the related questions to the agenda published notification on 1 daily newspaper for 3 consecutive initially. For other questions, the Bank will publish the responses days from June 30 - July 2, 2020, which is 10 days prior on the Bank’s website. Moreover, the Bank has documented to shareholders meeting day. those issues that are important, including the Bank’s explanation 1.2.3 Shareholders Meeting Arrangement in the minutes of the shareholders’ meeting The Bank has a policy specified that Chairman The Bank proposes all types of directors’ of the Board of Directors, the President and all the relevant remuneration to the shareholders’ meeting for approval on chairmen of the respective subcommittees must attend an annual basis. There is no other remuneration for directors the shareholder meeting except for having important and necessary other than those approved by the shareholders’ meeting. mission causing them to not attend the meeting. The purposes The Bank has specified in the invitation letter to inform shareholders of of the meeting are; to present the details about the operating the policy and criteria for remuneration of directors and performance and management policies and to answer sub-committees’ remuneration by comparing regulations any queries raised by shareholders. The Bank provides independent and remuneration rate, including the consideration of examiner of counting votes in the meeting. For the 27th annual the appropriateness of duties and responsibilities in providing policies, general meeting (2020), 12 out of 12 Directors or 100 percent of solving problems and decision making in the Bank’s business the Board of Directors attended the meeting. Group Head of operations for aiming the target and business direction of Financial Management as a Chief Financial Officer (CFO) also the Bank, which is compared with listed companies in the Stock attended the meeting. The Bank assigned KTB Law Co.Ltd. Exchange of Thailand and commercial banks at the same level to act as an inspector for monitoring the meeting to be transparent, and approved by the consideration of the Nomination and accurate in compliance with laws and regulations of the Bank Remuneration Committee. The Bank provided the amount of as well as the Good Corporate Governance and invited 1 minority remuneration as well as its information of the previous year. 154

At the 27th annual general meeting (2020), there is an approval The Bank has published the report of shareholders of directors’ remuneration of 2020: monthly remuneration and meeting on the Bank’s website within 14 days from the shareholders meeting allowances for Chairman and directors of the Board, meeting day (July 24, 2020) which can be downloaded both meeting allowances for Chairman of the committee and in Thai and in English. The Bank has notified the information via subcommittees and the directors’ bonus for the year 2019 electronic news system on the website of the Stock Exchange as proposed. The details of director remuneration are published of Thailand and the website of the Bank in order to notify under Directors’ Remuneration topic, on page 99. the shareholders about publication of the minutes of the shareholders’ In the agenda of the director nomination, there meeting. The Bank also provides an opportunity for shareholders was a consideration in the replacement of those directors whose who have questions or expresses their opinions regarding terms of office has completed. The Bank has proposed a list of the minutes of the meeting to ask questions or express opinions to each nominated director by person to the shareholders’ meeting the Bank within 1 month from the date of the resolution. for consideration and vote individually, according to the rules and procedures of director recruitment and nomination, as details 2. Equitable Treatment of Shareholders prescribed under the topic of Nomination and Appointment of 2.1 Policy of Equitable Treatment of Shareholders Director and Top Executives, on page145. In this regard, during The Bank has a policy to treat each shareholder the 27th Annual Ordinary General Meeting (2020), there were equally and fairly. The Bank does not discriminate against 4 Directors to resign from the position due to the end of terms of the shareholders and will enhance all groups of shareholders; office. All directors whose names are nominated at this time minor shareholders, institutional investors including foreign investors have to leave the meeting room temporarily until the shareholders’ can attend the meeting as well as using their rights as the meeting has already considered and voted. Then, they can shareholders together with receiving their benefits fairly. Moreover, return to the meeting room. the Bank facilitates shareholders by providing the meeting location 1.2.4 Disclosure of Resolution and Report of that is easy for travel and can completely support all shareholders Shareholders Meeting who attend the meeting. The Bank also provides enough warm After the 27th Annual Ordinary General Meeting welcoming staff who facilitate convenience to shareholders (2020) ended, the Bank published the resolution of the meeting during the meeting. In addition, the Bank prepares security and and the result of vote in favor and vote against or vote abstentions emergency responding plans for shareholders as well as using of each agenda, both in Thai and English to shareholders and technology in the meeting management. investors through electronic news system on the website of 2.2 Principles of Equitable Treatment of Shareholders the Stock Exchange of Thailand and on the website of the Bank, The Bank’s shares consist of 2 types of shares: ordinary before 9.00 a.m. of the next business day. shares and preferred shares which have the equal vote, namely In preparing the 27th Annual General Meeting of 1 share as 1 vote and with the majority rule except the case Shareholders (2020), the Bank has recorded the details in explicit as specified in the Bank regulations or as otherwise provided by matters as follows: the law. The Bank determined a shareholders’ meeting process in - Names and positions of all 12 Directors, totaling a manner that supports equitable treatment of shareholders to 100% of all Directors, attending the meeting, secretary of as follows: the Board of Directors who response as the meeting secretary, 2.2.1 Information Sharing Prior to Shareholders the Bank’s top executives, Group Head of Financial Management, Meeting auditor, representative of the shareholders’ rights protection The Bank provides details of proceeding of good volunteer, Thai Investors Association, representative of KTB Law corporate governance related to shareholders meeting, meeting Co.Ltd. who response as the meeting inspector and minority invitation with meeting documents, meeting process and shareholders who nominate themselves to be representatives disclosure of resolutions and report of shareholders meeting of the meeting in witnessing the vote counting. as prescribed under the article 1. Rights of Shareholders, summarizing - Method of voting, vote counting, meeting as follows: resolution and method and procedure for inquiry or comment, - The Bank discloses resolution of the Board of which the meeting secretary has informed shareholders before Directors meeting in Thai and English with details about the date the meeting starts. of the meeting of shareholders, meeting agenda and director’s - Summary of questions, comments, suggestions opinion on each agenda in order to let the shareholders know of shareholders and explanation of directors and executives of through electronic news system on the website of the Stock the Bank that have answered in each agenda. Exchange of Thailand and the website of the Bank 30 days before - Resolution of the shareholders’ meeting with the shareholder meeting day details of the number and proportion of votes of shareholders - Shareholders’ meeting invitation letters are in each agenda that are obviously specified as agree, disagree, specified about regulations, methods used in the meeting, abstain and voided ballot. procedures of voting which are not complicated including voting rights of ordinary shares and preferred shares that have equal Annual Report 2020 155

vote which is 1 vote for 1 share. Majority vote is a resolution in advance without necessity, especially the important agenda except in case that it is in accordance with the regulations of that shareholders have to take to study the information before the bank or as otherwise required by law. Moreover, in the making a decision unless it has been done correctly according meeting process, the meeting secretary informs shareholders to the procedures and procedures prescribed by law. In the past, about the abovementioned issue before the meeting starts. including the 27th Annual General Meeting of Shareholders (2020), - The Bank provides shareholders’ meeting the shareholders’ meeting has considered various matters in the invitation letters in both Thai and English and published on order of the agenda set in the invitation to the shareholders’ the Bank’s website 21 days prior to the meeting day. The Bank meeting which the Bank has delivered to shareholders in advance simultaneously distributes meeting invitation letters to shareholders without changing the order of the agenda and without adding who have rights to attend the meeting. Thai invitation letters any other agenda which is not specified in the meeting notice. are for Thai Nationality shareholders and English invitation letters Moreover, in the agenda regarding the election of directors, the are for foreign shareholders and are sent through Thailand Post Bank has proposed the names of directors for shareholders to 8 days prior to the meeting day. use to vote for election of directors individually. 2.2.2 Protection of Minority Shareholders Rights 2.2.3 Prevention of the Use of Insider Information For participations of shareholders in supervising - The Bank has a policy that no directors, the bank and nomination of qualified individuals who perform executives, employees and relevant persons are allowed to use their duties efficiently for the maximum benefits of all shareholders insider information of the Bank for personal benefit or for outsiders. and stakeholders, the Bank give opportunities for minority The Bank also determines insider information retention in writing shareholders to nominate persons with qualification information and everyone in the organization shall comply with such and the consent of the nominee to be selected through determination. The main point is that employees are not allowed the Nomination and Remuneration Committee and the Board of to trade and transfer in/out securities in a manner that is likely Directors consider and suggest to the shareholders’ meeting to be a disadvantage to outsiders by using inside information to consider the election as directors as well as providing the proper that is significant to the change in prices of securities that have agenda for the meeting of shareholders. The Bank proceeds not been disclosed to the public or the Stock Exchange of in compliance with regulations specified by the Bank through Thailand, and such employees perceives the information by the website of the Bank 3 months prior to the end of fiscal year, their positions that are able to know the facts or by being employees December 31 of every year. The 27th general annual shareholders of the Bank whether the said act is done for the benefit of oneself meeting (2020) period was specified from October 1 to December or others or disclosing such insider information for others to do 31, 2019. For the 28th Annual General Meeting of Shareholders so in which they receive the benefit. (2021), the period was specified from October 1 to December - The Board of Directors, the President, 31, 2020. The Bank informed the shareholders of the rights through the Group Head and incumbents of Department Head or equivalent an electronic news system on the website of the Stock Exchange or higher within the Account or Finance Group, are responsible of Thailand and the Bank’s website on September 24 and 25, for reporting changes in securities holding issued by the Bank of 2020 respectively. There are no shareholders nominating themselves, their spouses and their children who are underage, the name for a nominating consideration and there is no proposal to the Securities and Exchange Commission according to the to be included in the agenda of the shareholders’ meeting. regulations determined by the Securities and Exchange The Bank allows shareholders to assign proxies Commission. to attend the meeting and cast a vote on his/her behalf. - The Bank has a report of the Bank’s The documents delivered to shareholders along with invitation letter shareholding of the Board of Directors, the President and are 3 types of proxy form as required by Ministry of Commerce: the Group Head including their spouses and their children who type A- this form is general and uncomplicated; type the detailed are underage, to the Board of Directors every month as well as form contained specifying detail of what proxy was needed disclosing the Bank’s shareholding and changes of the Bank’s to do and the Bank recommended this type; type C- this form shareholding in the past year in the annual report of the Bank. would be used in case that the shareholder was foreigner investor - The Bank supervises the trading of securities and has appointed custodian in Thailand to take care of and the use of inside information retention by determining a limited the shares. Additionally, the Bank also attached the information period of trading of securities issued by the Bank and regularly regarding the nominated 2 independent directors as alternatives announce the regulations on the prevention of the use of insider for assigning proxy to vote in the meeting, as well as the list of information to the Board of Directors and employees through various the evidence or documents that proxy requires to bring with communication channels of the Bank. him/her to claim the right to attend the meeting along with - The Board of Directors has a policy requiring the suggestion for proxy assignation process as well as having that all Bank’s Directors must inform a secretary of the Board of no policy to set any criteria which is difficult for shareholders Directors meanwhile the top executives to inform Compliance to assign proxy. Department 2 about the purchase of Bank’s shares at least The Bank oversees the rights of shareholders by 1 day prior to the trading day. not adding additional agenda items that are not informed 156

2.2.4 Conflict of Interest of the Director 3.1.3 Creditors: The Bank’s policy is to treat creditors of For the meeting no. 13/2009 (751) in June 18, 2009, all groups including depositors, debenture holders and other creditors the Board of Directors considered to follow section 89/14, 89/15 and equally and fairly on the basis of fair returns for both parties and strictly 89/16 of Securities and Exchange Act B.E. 2535, which is stated that under the agreements of covenants agreed upon. In case of non- a director and an executive shall file with the company a report on compliance with any one of the covenants, the Bank will promptly his interest or a related person’s interest in relation to management of notify the creditor to jointly discuss the issue. In conducting business the Bank or the subsidiary in accordance with the form specified by negotiation, the Bank shall refrain from demanding or paying any the Bank and the Bank secretary will be responsible for keeping dishonest benefits in trading. Moreover, the Bank regularly prepares a report on interest then the Bank secretary shall submit a copy of report financial reports that are accurate, complete and submit to the on interest to the Chairman of the Board of Directors and the Chairman creditors in a timely manner. of the Audit Committee within seven business days from the date on 3.1.4 Trading Partners: The Bank operates business which the Bank has received such report. In this regard, during 2020 with trading partners equally. The Bank honestly conducts and previously, directors and executives of the Bank have reported procurement and agreement for transparency by emphasizing in accordance with the rules and procedures prescribed by the Board on the maximum benefit of the Bank as a priority, not benefiting of Directors. In addition, as the Bank regulation no.34 is prescribed that to someone only, providing complete, accurate and truthful any director has a vested interest in any meeting, he/she shall not information to the customers, avoiding gift / reward / banquet vote on that matter or the President may invite him/her to leave or specific private service receiving. The objective is to avoid the meeting temporarily. rumors and to prevent favoritism in someone specially by strictly complying with procurement regulations. Besides, the Bank 3. Consideration on the Role of Stakeholders supports sustainable business with trading partners by occasionally 3.1 Treatment to the Stakeholders providing knowledge, developing trading partners’ potential, The Bank recognized the rights and roles of various enhancing production capability together with standardized groups of stakeholders, internally or externally, and has included service, clarifying and monitoring that trading partners respect it as an integral part in the Code of Conduct disclosed through human rights and treating their workers fairly, responding to social media including the Bank’s website. The Bank emphasized on and environment as well as monitoring, inspecting and evaluating strict compliance and it is also published as manuals and trading partners. distributed to all business units, which could enable the Bank to The Bank Procurement Policy Statement are as have sustainable growth. The guidelines are summarized below: follows: 3.1.1 Shareholders: The Bank is determined to a. Procurement process must be fast, correct, conduct business with prudence and transparency, making profits frugal, transparent, worthy, verifiable, trackable and can be grow continuously and steadily, completely comply with laws evaluated. and regulations, adhere to code of conduct for creating b. Procurement process must be the most shareholders’ trust as well as boosting its competitiveness and beneficial for the Bank and the procurement must pertain to creating more value for the shareholders in the long run. Moreover, objectives especially in quality, price and the number / amount the Bank considers on shareholders’ rights by continuously received. declaring accurate news and information to shareholders, pays c. Procurement must be clear, fair as well as reasonable dividends and allows shareholders to share their must be considered in quality, worthiness and benefits. The Bank opinions and participate in the Bank’s operation. must consider the effect toward people and society by not only 3.1.2 Customers: The Bank operates business under focusing on the lowest price but also focusing on long term law and standard relating to determination to serve customers worthy resource usage. The Bank also uses factors in evaluating with willingness, equity and fairness. The Bank also considers the the procurement results and then selects the most beneficial health and safety of the customers aiming for customer needs choice. and satisfaction by providing diversity of good financial products d. Procurement competition must be fair and and services. The Bank develops working processes and reasonable. The Bank equally considers of qualifications and appropriately applies up-to-date technologies with the process abilities of all bidders especially in information provision and the as well as developing service channels using various technologies consideration that will not cause advantages or disadvantages in order to reduce cost and to facilitate the customers. For data among bidders. safety, the bank prepares measures to take care of customers’ Criteria for Trading Partner Selection confidentiality as well as providing customer complaints channels 1. The profession of the bidder must be the provider and good care in customers’ problems solving. The Bank also of the goods/services specified by the Bank and/ or the conducted customers’ satisfaction surveys for improving product representative appointed by the copyright owner. and service. Any advertisement or promotion (sales conduct) 2. The bidder must not be named in the list of work must be done responsibly and must not lead to misunderstandings abandoners which has been circulated. or get advantage from customers’ misunderstanding. Annual Report 2020 157

3. The bidder must not have any privilege or deliverer, trading partner, collaborator and the Bank’s employees. protection that allows him the possibility to reject presence in 4.2 The bidder must operate its business with Thai court, unless the government of the bidder has issued transparency, verifiability which creates fair and freely competitive a disclaimer of such protection. business as well as preventing monopoly, corruption and distortion 4. The bidder must be an authorized person to of competition mechanisms. perform juristic act on behalf of the company, partnership or 5. Safety, Occupational Health and Environment juristic person. In case the bidder cannot submit bid envelope (SHE) in person, the bidder may assign authority to another director, 5.1 The bidder must conduct and continuously partner or employee to do so on his behalf on the condition that improve a safe and hygiene working environment complying the assigned person must present the letter of power of attorney with law or regulation related to employees. signed by the director or authorized partner of the juristic person 5.2 The bidder must conduct safety and health and stamped by the company’s/partnership’s seal to the Bank care of employees and communities together with a saving as evidence. environment in all areas where the bidder operates its business. 5. The bidder must not be named in the list of those 3.1.5 Business Alliances: The Bank is firmly determined who fail to show income-expense statement or show substantially to comply with the agreements made with its business partners, incomplete income-expense statement while participating provide assistance for mutual business benefits, enhance service in the procurement process and at the time of signing the contract. to meet standard and assist each business for benefit in overall. 6. The bidder must have no mutual benefit with 3.1.6 Competitors: The Bank has a policy to operate other bidders and/or a committee member of that procurement. business with fairness, transparency, not create unfair competitive The bidder must not obstruct fair competition of price. advantage as well as no policy to falsify or distort competitors’ 7. The bidder must not be bankrupted, in fact. At the same time, the Bank avoids making deals or discussions the process of being sued for bankruptcy, requesting for business with employees of other organizations or financial institutions rehabilitation or debt restructuring. The bidder shall prepare about geographical locations, marketing, customer segmentation, the juristic person/person certificate. interest rates, fees and commissions as well as products, services Guidelines for Working with the Bank or business plans that may exert negative impact on the Bank’s 1. Honesty business competition. 1.1 The bidder must run its business with honesty, 3.1.7 Social and Environmental Responsibility: : The morality and not contrary with laws and moralities. Bank emphasizes on consciousness about social and 1.2 The bidder must not exploit its customer such environmental responsibility among Executives and all levels of as adulterating products or providing substandard products. employee through CSR policies and projects held by the Bank, 1.3 The bidder must not offer any rewards to with an intention to be a good organization in the society as the Bank both in monetary and non-monetary form for facilitating well as participating in overall community and society any bidder’s process or for convincing any decisions. development. For the environment, even the Bank’s business is 2. Confidentiality about financial and economy which do not directly affect the 2.1 The bidder has a policy in concealing the environment and natural resources but the Bank realizes the Bank’s confidential information. importance of environmental saving by specifying in the Bank’s 2.2 The bidder must prevent any confidential code of conduct. Moreover, the Bank aims to protect and control information leakage and not use the Bank’s information for illegal any impact that may occur by the Bank’s business operations. objectives and/or for personal advantage and/or for trading 3.1.8 Board of Directors and Executives: The Bank’s benefit as well as having a storage system for the Bank’s Board of Directors and executives are aware of their rights and documents and information. they are ready to be a role model in exercising their rights and 2.3 The bidder must possess Business Community performing their duties as specified by the Bank. At the same Plan for supporting the continual service in case of service time, they realize the importance of equitable and fair rights suspension occurs among groups of stakeholders. 3. Obedience to law and Regulations Compliance 3.1.9 Employees: The Bank prioritizes human resources 3.1 The bidder must comply with related management and development. The Bank employs the human government’s regulations as well as respecting the culture and resources management system in which employees of all levels tradition of all areas that the bidder operates its business. have equal chance to advance in their career path. The Bank 3.2 The bidder must provide wages and benefits complies with the related law and standard fairly and respects under the law to its employees accurately and reasonably. human rights. At the same time, the Bank also ensures that employees’ 4. Advantages / Disadvantages and Conflict of salary, remuneration, welfare and other benefits are comparable Interest to those of other leading companies. The Bank also provides 4.1 The bidder must notify the Bank in written remuneration to its employees in accordance with short term and form in case there is a conflict of interest between the job long-term performance of the Bank. The Bank uses Balanced 158

Scorecard as a measurement of employee’s performance for for reporting of misconduct, fraud and corruption as well as employee’s remuneration payment. The Bank proceeds PDO Policy preventing internal data usage and conflict of interest. The Bank (Performance Driven Organization) in which the employees received participates in the Anti-Corruption Network and encourages remuneration in compliance with their own performance. Moreover, other companies and trading partners to declare Anti Bribery the Bank supervises that all employees receive their salaries and and Corruption Policy including participating in Anti-Corruption welfare suitable for their duties and responsibilities as well as Network as well. The Bank is certified for the membership renewal comparable to other leading commercial banks or other financial of Thailand’s Private Sector Collective Action Coalition Against institutions. The Bank also provides various kinds of welfare in order Corruption (CAC). to meet employees’ needs. Learning methods, training courses and 3.1.14 Procurement with Government: : The Bank human resources development processes have been improved to insists to compete in a business world with honesty and enhance the capability of employees and ensure business transparency. Any work processes related with procurement must competitiveness. The Bank also attaches importance to employees’ comply with procurement law and regulation. The Bank must not security by providing an environment that is safe and suitable for interfere or take advantage of personal relationships for doing work. Security measures have been established in compliance with anything inappropriate to any government officers in order to the law and the Bank’s regulations. Each business unit is required obtain contracts or agreements from governmental organizations to prepare a business continuity plan both for normal and critical or state enterprises both domestically and internationally. situations to ensure safety of employees and the Bank’s properties. Most of all, the Bank must comply with Anti Bribery and Corruption. The Bank encourages employees to respect and honor one another along the guidance stipulated in the personnel code of conduct. 3.2 Stakeholders Engagement In terms of employee welfare, the Bank promotes the well-being In its operation, the Bank adheres to good corporate of employees by providing benefits such as a clinic to provide governance principles, emphasizes on management with medical care to employees, their families and retired employees; transparency, integrity and fairness to all stakeholders and takes educational allowance for children of employees, medical into account the benefits of all relating parties including allowances, mediation training project and welfare loans. employees, customers, society, shareholders, trading partners 3.1.10 Government Sector: Besides aiming to and regulators. The Bank has also announced its adoption of generate profits for shareholders, creating wealth for customers anti-bribery and corruption policy which is crucial for developing and supporting overall society in enhancing better life, the Bank business operation processes that meet the standard, generating also focuses on strictly complying with law, announcements and growth and wealth to all stakeholders following the Bank’s regulations from supervisory authority as well as cooperating with “Growing Together with Sustainability” vision. The Bank has other related organizations. The Bank believes that rightful and established stakeholder engagement policy as part of its ethical business operation is the important foundation for stability corporate governance policy and code of business conduct. and sustainability. The Bank has been treating all groups of stakeholders equally 3.1.11 Respect for Human Rights: The Bank operates and fairly by considering impact on stakeholders and the rights business by adhering to domestic and international law and of stakeholders to engage via various channels. For instance, Universal Declaration of Human Rights or (UDHR). The Bank as in 2020, the Bank reviewed and updated its principles in every department and every operational area supports every anti-corruption policy to meet international standards. Giving fundamental human rights. Moreover, the Bank commits to protect or accepting bribes and corruption are illegal and the Bank employs human rights and shall not involve with human rights violation the Zero Tolerance policy. Furthermore, the Bank has conducted as stated in the UDHR. surveys to solicit employees’ opinions in order to improve 3.1.12 Respect for Intellectual Property: The Bank will management conditions to fulfill the needs and expectations of not violate any intellectual property whether they are patent, the employees. Survey of employee engagement are conducted trademark, copyright, trade secret and other copyright matter biannually. The Bank allows external stakeholders to participate by broadcasting or adjusting any intellectual property. in occasions, for example, shareholders may voice their opinion The intellectual property must be allowed by the owner. At the same freely, propose an agenda and nominate a candidate for director time, all employees must protect the Bank’s intellectual properties at the Shareholders Meeting. Additionally, stakeholders may namely patent trademark, copyright, trade secret and other directly contact committees and business units involved in information of the Bank. the matter to give useful suggestions or information that will benefit 3.1.13 Anti-Bribery and Anti-Corruption: The Bank the Bank or make complaints about any wrongdoing. has a policy to conduct business operations in compliance with law, morality, related standards together with all kinds of 3.3 Whistleblowing and Complaints anti-bribery and anti-corruption. The Bank complies with The objective of the Board of Directors is to satisfy Corporate Governance Policies which are internationally accepted. all groups of stakeholders, provide direct communication channels At the same time, the Bank declares Anti Bribery and Corruption for stakeholders to reach the Board of Directors and related Policy to the public and provides Whistle Blowing as a channel business units. For example, customers and general public may Annual Report 2020 159

report any wrongdoing or comment about the Bank through Channels for shareholders wishing to present various channels of the Customer Complaint Center as follows: issues that are beneficial to the Bank or relevant matters relate Whistle Blowing Channels to the rights of shareholders through Independent Director The Bank sets the whistle blowing policy and Committee via E-mail: [email protected] gives opportunity to stakeholders to report any wrongdoing through various channels. Any wrongdoing including corruption, 4. Disclosure and Transparency illegal, violating regulation of the Bank’s or regulators made by 4.1 Disclosure and Transparency Policy directors, executives, staff, employee or subsidiaries’ staff can The Board of Directors gives policy and supports the report through the specified channels. Anyhow, the name of the Bank to monitor the information disclosure and the transparency whistle blower will be kept confidential and protected during operation, fair treatment for stakeholders, adhering to conduct the examination and after the process finished. Whistle blowing business responsibly to society, enhancing all executives and channels are as follows: employees to be good citizen and performing their duties with - Send an email to the Chairman of the Board honesty, transparency and morality as well as leading to Corporate of Director at [email protected] Governance Culture and be accepted by governmental and - Send an email to Whistle Blowing Team at private organizations. The Board of Directors schedules and [email protected] supports policy to disclose the Bank’s information in accordance - Send a letter to the Whistle Blowing Team, with law, regulation, requirement and other important standards the Office of the President, 35 Sukhumvit by providing Information Disclosure and Transparency Guideline Road, Klong Toey Nua Subdistrict, Wattana for all levels of employees, all departments in the central part District Bangkok 10110. and region as well as publishing on the Bank’s website. - Telephone to +662 208-4120 4.2 Transparency and Disclosure Practices - Fax to +662 256-8778 4.2.1 Information disclosure under the Official Channels for Complaints Information Act, B.E. 2540 - Krungthai Contact Center +662 111-1111 The Bank has taken steps to disclose the Bank’s (24 hours) information to the public in accordance with the Official - Krungthai Bank website Information Act, B.E. 2540 for the benefit of the people in accessing - E-Mail: [email protected] the Bank’s information. The main points of the proceeding are - https://www.contactcenter.ktb.co.th as follows: or E-Mail: [email protected] 4.2.1.1 Dissemination of Information in the - Fax: +662 256-8170 Information System - Send a letter to Office of the Board of The Bank established the e-Procurement Directors, Krung Thai Bank Plc., 13th floor, sub-site (Procurement announcement) that directly links (Quick Nana Nue Building, 35 Sukhumvit Road, Link) with the Bank’s website in order to facilitate the general Klong Toey Nua Subdistrict, Wattana District public to access information and news about the Bank’s Bangkok 10110 or PO Box 44, Hua Lamphong procurement. It is required to specify a current summary of Bulk Mail Centre, Bangkok, 10331 procurement considerations between the Bank and external - Customer satisfaction survey by Business Risk parties, announcements of the Bank’s procurements which are and Macro Research Team. The responses announcements of procurement by price examination and collected will be submitted to executives e-bidding, announcement of cancellation of price examination and related business units for improvement. and e-bidding, announcements of the winner of price - Employees can directly report or make examination. In addition to searching for information from comments to the Board of Directors and the Bank procurement as already published, those interested Executives by sending an e-mail to their in proposing for the Bank’s procurement can log in to the system respective email addresses which can be by themselves, by only providing their personal information and found in the phonebook on intranet. Other comply with terms and conditions determined by the Bank. complaint channels are: 4.2.1.2 Disclosure of the Bank and Customer Send an email to hr.care@krungthai. Information to Requesting Agencies and Third Parties com, administered by the Head of Legally authorized agencies, government Human Resources and Corporate and private agencies are able to request for an audit of Governance Group, the Head of the Bank’s information under the rules and regulations of the Banks Welfare and Employee Relation Sector as follows: and the Head of Discipline and a) Legally Authorized Agencies Employee Relation Department. To request documentary evidentiary Hotline: Telephone +662 208-8887/ E-Mail: or information or request for the Bank employees court testimonies, [email protected] the legally authorized agencies are able to request information 160

and documentary evidentiary related to account opening - Preparation of explanation and application form and accounting transaction of deposit account analysis of the management for analytical summarization and as well as requesting for deposit-withdrawal information audit, for using as a reference of quarterly disclosure of financial requesting for an acknowledgement of the remaining balance statements. in the deposit account, etc - Preparation of accurate financial b) Non-Legally Authorized Agencies and statements in compliance with the Generally Accepted Individuals Accounting Principles and selection of appropriate accounting There are government agencies, private policies. sectors and the general public who request for the information - Disclosure of auditor remuneration audit. Most of the requests are personal information audit which which are audit fee and non-audit fee in the annual report. the Bank cannot disclose due to the Official Information Act, B.E. - The Board of Directors requires 2540 which states that “A State agency shall not disclose personal responsibilities of the Board of Directors for the financial report. information in its control to other State agencies or other persons The Bank discloses such report together with the auditor’s report without prior or immediate consent given in writing by the person in the annual report. who is the subject thereof.” 4.2.2.2 Non-Financial Information Disclosure 4.2.2 Disclosure of Information in Compliance - Disclosure of the operations of the Board with the Principles of a Listed Company and Good Corporate of Directors such as approval and support for the Bank to establish Governance. a corporate governance policy in writing e.g. Corporate The Bank oversees that key information, financial and performance related data are disclosed adequately, Governance Policy, Social and Environmental Responsibility Policy, accurately, completely, transparently, comprehensively, timely Anti-Bribery and Corruption Policy, etc. and reliably as prescribed in the requirements of the Securities - Annual preparation of the Principles of and Exchange Commission and those of the Stock Exchange of Good Corporate Governance Compliance report and the Thailand, namely Annual Registration Statement (Form 56-1) and Sustainability report by disseminating policies and Good the Annual Reports (Form 56-2). However, most of the information Corporate Governance Compliance report on the Bank’s website. in such forms is disclosed on the Bank’s website in Thai and English - Disclosure of name list, personal with regular updates, thus helping shareholders, customers and background, duties & responsibilities and term of office for interested persons to access the reliable information with ease all directors and subcommittees directors as well as number of and equality. The Bank proceeded at least as follows: meetings and the number of attendances of each director for 4.2.2.1 Financial Information Disclosure the meeting in last year, training record of each director in The Board of Directors recognizes and the annual report and on the Bank’s website. is responsible for the financial statement of the Bank and - Disclosure of the shareholder structure its subsidiaries including the financial information that appears of the Bank and the Bank’s shareholding information of directors in the annual report. Such financial statement is prepared and executives for both direct and indirect way. in compliance with the Generally Accepted Accounting Principles 4.2.2.3 Financial and Non-Financial by using appropriate accounting policy based on prudence, Information Disclosure accuracy, and completeness in order to accurately reflect - Disclosure of the Policy and the Bank’s operating results. It is required to provide performance Remuneration of each director and top executive which reflect reports and disclose important information transparently and their duties and responsibilities. The Bank provides reasonable sufficiently by continuously reporting to the Stock Exchange of remuneration to directors. The Bank has a Nominating and Thailand for the benefit of shareholders and general investors. Remuneration Committee to review the policy by considering In addition, the Board of Directors appointed the Audit Committee the appropriateness in accordance with the responsibilities of comprising the Independent Directors who are responsible directors, the Bank’s financial status, comparable with other for supervising the reliability and accuracy of financial reporting companies in the same business and following the resolutions of as well as supervising the internal control system sufficiently and the shareholders’ meetings. appropriately as to ensure that the financial statement of 4.2.3 Investor Relations the Bank is reliable and in corresponding to the law and related The Finance Strategy Team has been assigned regulations. to equally and fairly provide and disseminate information and activities Financial Information Disclosure of the Bank which are beneficial for all related parties, including retail - Delivery of financial statements and investors, institutional investors, general investors, stock analysts, domestic financial reports within the timeframe in accordance with and foreign fund managers as well as government agencies through the regulations of the regulatory agencies, namely the Securities and communication events. In 2020, the Bank’s executives and investor Exchange Commission of Thailand, the Stock Exchange of Thailand relations officers met with analysts and investors on various occasions and as required by the relevant laws. and provided them with useful information. The occasions were as follows: Annual Report 2020 161

organization management that is stable, transparent and Format No. of Times sustainable through applying technology and innovation to manage and provide financial services. The Bank established One-on-One Meeting & Conference Call 46 key objectives and goals of sustainable value creation. The Board Analyst Meeting & Fund Meeting 4 should strengthen financial stability, provide shareholders with Total 50 appropriate returns and top-ranking product and service Contact Information: Finance Strategy Team management. The Board of Director approved the determination Tel: +662 208-3668-9 of the Bank’s mission as follows: Fax: +662 256-8800 Vision E-Mail: [email protected] Growing Together for Sustainability: Determine to look Address: Krung Thai Bank Pcl., 6th floor, after and develop the employees’ potential in order to encourage Nana Nua Buliding 35 Sukhumvit Road, growth and wealth for customers, create better quality for society Klong Toey Nua Subdistrict, Wattana District, and environment and create sustainable returns for shareholders. Bangkok, 10110 Mission Bank’s Website: Navigate to “Investor Relations” menu (1) Take care and improve the potential of employees and the operating system. 4.2.4 Communication and Branding of the Bank (2) Continuously provide valuable services and advice Marketing Strategy Department has been to the customers. assigned to publish news and information of the Bank through (3) Develop the economy, society and environment mass media on various occasions in 2020 as follows: sustainably. (4) Create sustainable returns for shareholders. Format No. of Times 1.2 Under corporate governance on organization management, the Board of Directors formulates strategies for Press Release 145 short-term and long-term business operations in compliance with the company’s mission, monitors the Management to implement Press Conference 13 the strategic plans continuously and supports necessary resources to make them achieve the goals. The board also ensures Press Interview with Top Executives 9 communication and information disclosure to be appropriated, performs duties with the awareness of protecting shareholders’ Total 167 benefit honestly. The Management must make a report to the board within the proper period for evaluation and annually review 5. Responsibilities of the Board of Directors vision, mission, core value and the Bank’s strategies, including In 2020, the Board of Directors has considered informing employees of the Bank’s vision, mission and directions Principles of Corporate Governance Compliance according to in order to have correct understanding and operations in the business context of the Bank, that has been considered by the same directions throughout the organization. the Corporate Governance and Social Responsibility Committee 1.3 The Board of Directors’ responsibilities are to ensure with responsibility and prudence. The Board of Directors approved that all directors and executives perform their duties with to maintain the appropriate policy of the CG Code Compliance responsibility, care, integrity and in compliance with laws. and execute operation according to the business context of the The board also supervises and oversees the operation of the Bank’s Bank in order to create sustainable business value. The Board of subsidiaries in accordance with its objectives, regulations, directors has reviewed the business operation of the Bank in the resolution of the Bank’s Board of Directors and a general meeting compliance with the CG Code in each principle in order to of shareholders’ resolution under conditions and regulations ensure the appropriate outcome, summarizing as follows: of related laws and good governance in order to create the Bank’s value sustainably. In 2018, the Board of Directors approved Principle 1 Establish Clear Leadership Role and the Charter of Board of Directors that defined the authority and Responsibilities of the Board (Establish Clear Leadership Role and responsibility of the Board of Directors as well as the role and Responsibilities of the Board) duty of Chairman of the Board of Directors with the purpose 1.1 The Board of Directors oversaw the company and to set as the reference for the operating performance of all Directors. strengthened good governance, in order to become a financial The Charter has become effective since November 21, 2018 institution for development to create opportunities for people to onwards. Subsequently, the Bank determined to review access funding sources thoroughly, along with providing financial the Charter to be appropriate and up to date. The Bank has published literacy to support the strength of the foundation economy. As the Charter of the Board of Directors as well as the charter of a result, it leads to the development of the competitiveness of the sub-committees, which interested persons can download the country and reduces inequality in society, under the from the bank’s website. 162

1.4 The Board of Directors is determined and aware of (6) Conflict of Interest business operations with transparency, integrity and fairness Consists of principles of internal data usage and according to good corporate governance principles in order to data blocking, personal investment activities, conflict avoidance become the effective organization that excels in operating and accepting and providing incentives. business, concerns ethical responsibility and takes into account (7) Data Management the benefits of all stakeholders. Such operation shall establish Consists of principles of confidential data confidence and generate benefits to the shareholders, who are management and responsible communication. vital to the Bank’s sustainable growth and prosperity. The Board (8) Overall Governance of Directors approved to establish good corporate governance Consists of principles of compliance culture and principles in writing and first announced the implementation internal whistleblowing procedure. in 2002. The board also reviewed and adjusted the policy regularly (9) Trade Monopoly and Dispute Resolution to be appropriate and updated. The Bank published the corporate Consists of principles of trade monopoly and internal governance policy in Thai and English versions that can be and external dispute resolution. downloaded from the Bank’s website. 1.5 The Board of Directors has approved and Principle 2 Define Objectives that Promote Sustainable announced the implementation of code of conduct since 1998. Value Creation The code of conduct has been adjusted regularly in order to be 2.1 The Board of Directors considered, annually reviewed appropriate and updated as well as raising international and approved the Bank’s vision, mission and strategies in order standards, complying with dynamic circumstances and to be appropriate and comply with the business environment. the Banking Industry Code of Conduct of the Thai Bankers’ Association. The Bank processed the review systematically by considering The code of conduct is written for directors, executives and them with prudence from internal and external factors in employees as a guideline on standard practice, ethical business all aspects: economy, politics, environment, current innovation and operations and law compliance. Besides this, all staff should have technology and their future trends, including the Bank’s readiness, understanding and intention to comply with applicable law. expertise and competitive capability. Moreover, the Bank All supervisors at all levels shall have duties on monitoring to ensure collected data from various sources and related persons, including that all employees are aware of, understand and intend to survey results of important stakeholders’ needs and expectations adhere to the code of conduct as a part of employees’ discipline. and attitude survey results of employees, customers and people However, the current code of conduct, reviewing and approving etc. The Bank defines the Bank’s policy framework, vision, mission, by the Bank’s Board of Directors, is divided into 9 categories, strategy and business plan, including monitoring and ensuring covering 3 key principles, namely integrity, fairness and the implementation to achieve the organization’s goals. responsibility to stakeholders which the Bank always adheres to. In the meantime, the Bank organizes a brainstorming meeting between (1) Code of Business Conduct the Bank’s Board of Directors, the Management and executives Consists of practices on personal integrity, compliance of the affiliated companies to determine strategic directions and with applicable law, ethical business principle, anti-corruption, important projects that will drive the business group to achieve anti-bribery, donation, giving back to community and corporate strategic goals. In this regard, the management takes social responsibility, environmental care, respect for human rights, the comments received from the meeting into the formulation of respect for intellectual property rights and government the Bank’s business plan and proposes it to the Board of Directors procurement. for approval. The Bank also communicates the Bank’s strategic (2) Role of Directors and Executives plans and business plans as well as important goals to employees Consists of principles of administrative role, in the organization, such as through the annual seminar between supervisory role and transactions with the Bank. the Bank’s Board of Directors and executives (Business Strategy (3) Service Standard Seminar). This is aimed that executives, namely the branch Consists of principles of standard of terms and managers, business unit managers, department heads and above conditions of service, requirements of service standard and debt can acknowledge the policy and management direction in collection standard. an attempt to set proactive guidelines for operations. (4) Personnel and Establishment 2.2 The Board of Directors operated a policy to have Consists of principles of workplace diversity, employment an obvious process, engagement channels or communication equity, dignity at work, safety workplace and fair treatment channels between stakeholders and the Bank and defined groups (5) Responsibility to Customer of stakeholders related to the Bank’s insiders and outsiders, Consists of principles of taking care of maximum including guidelines for all stakeholders. The Bank formulated benefits for customers, handling procedure of customer complaints these issues in corporate governance policy and disclosed the and advertising and marketing activities. principles in the topic of consideration for stakeholder role on Annual Report 2020 163

page 145 such as principle for stakeholders, stakeholder’s the Bank established “Anti Bribery and Corruption Policy” and opportunity to participate, whistleblowing and filing complaints announced the policy to the public, along with the preparation through specified operation channels. of the anti-bribery and anti-corruption handbook and a manual 2.3 The Bank Board of Directors has a policy for on prevention of conflicts of interest. This is for the Bank’s the Bank’s treatment of stakeholders with respect to the rights employees and executives to use as the basis for their operations. under the relevant laws and not violating rights of stakeholders. The Bank encouraged the participation of the Anti-Corruption It is required to provide a process to promote cooperation Network and encourages other companies and business between the Bank and the interested parties in maintaining fair partners to have anti-corruption policies and participate benefits as well as creating wealth and sustainability for the the Anti-Corruption Network as well as being certified of membership business which can be summarized as follows: of the Thailand’s Private Sector Collective Action Coalition Against 2.3.1 Respect for Human Rights Corruption from the Private Sector Collective Action Coalition The Bank has a policy to conduct business Against Corruption (CAC) project. The Bank participated in in compliance with domestic law, international laws and the declaration of intention of the CAC project and has undergone the Universal Declaration of Human Rights (UDHR). The Bank the self-assessment in establishing policies and guidelines for encourages the basic principles of human rights in every business preventing corruption in compliance with the regulations specified line and in all areas where the Bank operates. The Bank also by the CAC Committee. The Bank was certified by the CAC respects the protection of human rights and not involving Committee and became the member of the CAC since in human rights violations. Besides, the Bank also stipulated September, 2011 and was certified for the second time the Human Rights in the operation practices of the employment and in November, 2019. Besides, the Bank formulate the policy of appointment, as well as taking care of employees in accordance Anti-Money Laundering and Combating the Financing of Terrorism: with international labor principles. AMLCFT as in compliance with international standards, such as 2.3.2 Respect for Intellectual Property the Vienna Convention (1988) and Financial Action Task Force The Bank has a policy to conduct the business without (FATF), etc. violating all intellectual property rights such as trademarks, patents, The Bank promulgates the Whistle Blowing policy by trade secrets and other copyrighted works. In using or modifying providing a channel for whistleblowing, which allows everyone any intellectual property, it is required to obtain permission from to report the wrongdoing. If any person observes any act the owner of that intellectual property. All employees are required of offense by the Bank’s or affiliates’ Directors, employees or staff, to protect the intellectual property of the Bank which are patents, whether it is fraud, illegal actions, non-compliance with Bank’s trademarks, copyrights, trade secrets and other information of regulation or rules of various regulators, he/she is able to provide the Bank. clues through the established channels. The names of 2.3.3 Environment the whistleblowers will be kept confidential and protected, The Bank has adopted the international standard of both during the investigation and after the procedure. ISO 26000 as an environmental practice guideline, especially on the practices for the environmentally-conscious business. Principle 3 Strengthen Board Effectiveness For example, the Bank provided Green Loan, organized 3.1 The Board of Directors consists of the members who campaigning for each unit to dispose of documents securely via passed the recruitment process from the Nominating and the Shred 2 Share project so as to reduce tree destruction. To reduce Remuneration Committee as stipulated by law and good the paper usage, the Bank encouraged the Green Meeting campaign corporate governance principles. The Nominating and and implemented the project “Internal Digitization-Paperless Branch’’ Remuneration Committee considered candidates from various aimed at reducing 50% of total paper used in branches within sources, including the director pool in order to nominate 5 years. Lastly, the Bank also organized the “Krungthai Loves the person with expertise matches to a specific skill matrix that is Environment” project throughout the country, etc. in line with the Bank’s present and future missions and strategies, 2.3.4 Anti-Corruption including the Bank’s sustainable growth. The details of The Bank has signed a memorandum of understanding the nominating and selection process is in the Nomination and with the Moral Promotion Center (Public Organization) in order to Appointment of Directors and Executives section on page 145. drive the Bank to become a Moral Organization, through the Therefore, the Board of Directors consists of a group of persons project “Krungthai Moral Initiative”, along with implementing with various qualifications in terms of skills, experience and talents a Zero Tolerance policy in practice throughout the organization. that are beneficial to the Bank. The Board comprises at least The Bank is determined to conduct business under the law, ethics, one person having knowledge or working experience related relevant standards and working against all forms of corruption to the commercial banking business, at least 1 person in accounting as well as adhering to the principles of good corporate and finance, and at least 1 person in information technology. governance that are accepted internationally. In this regard, Personal differences in religion, culture, race, gender, etc. are 164

not a limitation for holding office of a director of the Bank. the Independent Director Committee in the topic of Shareholding The current Board of Directors consists of two women serving as and Management Structure on page 96 and in the topic of directors (1 independent director and 1 director of the Bank). Nomination and Appointment of Directors and Executives section All members of the Board of Directors have sacrificed their time on page 146. to perform their duties responsibly, therefore, the Bank has 3.4 The Bank’s Articles of Association, Clause 19 states a strong Board of Directors. The directors’ term of office is prescribed that the committee shall elect a director to be chairman. clearly in Corporate Governance policy and Clause 22 states According to the Charter of the Board of Directors, the chairman that one-third of the members of the Board of Directors must of the Board of Directors as the leader of the organization is retire from the position at each Annual Ordinary General Meeting. responsible for overseeing the Bank, shareholders and other Consequently, a director of the Bank can hold office for a term stakeholders’ interests in order to achieve maximum interests in of 3 years. Moreover, the Bank has established an appropriate the long term. The Chairman shall be the leader in synergy of term of office for directors: each member of the Board of Directors potential, ideas, creativity and competency of the Bank’s directors may not be in the position for longer than 3 consecutive terms and Management in order that strategic plan will succeed in of office unless his qualifications justify it. The Board of Directors short and long term. The Chairman shall monitor Management’s will consider the effectiveness of such director in performing operations closely and continuously by ensuring that the his duties and explain the reason thereof and his performance Management reports financial status and necessary information to the shareholders. Until now, none of the directors held office to the Board of Directors monthly. Moreover, the Chairman shall for more than 3 consecutive terms. be a major force to drive the Bank’s corporate governance 3.2 The structure of the Board of Directors consists of policy and Responsibility to Society and Environment, creating 12 members in accordance with the resolution of the 14th Annual ethics to employees at all levels. Roles and responsibilities of the General Meeting of Shareholders on April 27, 2007. The number Chairman consist of 6 aspects: management, meetings of the of the directors is appropriate for the size of the organization Board of Directors, development and performance evaluation and efficiently performing duties as well as creating a proper of the Board of Directors, relationship between shareholders, balance of power. On December 31, 2020, there are 12 members shareholders’ meetings and other roles as specified in the topic of the Board of Directors. The Board of Directors, therefore, consists of Shareholding and Management Structure on page 89. of 1 executive director and 11 non-executive directors. whereby 3.5 For the utmost benefit of the overall shareholders, 5 of them are the Independent Directors or equal to 50 percent the Board of Directors must be truly independent of the of the total members. The number of the independent directors management while performing their duties. Responsibilities and exceeds the SEC’s regulations requiring at least one-third of duties are clearly divided between the Board of Directors and the board, and at least 3 persons. All Independent Directors are the management. The Board of Directors is in charge of specifying qualified as the definition stated in the topic of Shareholders’ policy for management and working system as well as overseeing Structure on page 146 and in line with the Capital Market that all activities performed by the Bank are legal and ethically Supervisory Board’s regulation that are independent from sound. To ensure that no person has unlimited authority, the the management and the major shareholders. No Director can serve Chairman of the Board of Directors cannot be the same person more than 9 consecutive years. as the President. Responsibilities and duties are clearly divided 3.3 The Board of Directors has emphasized the between the Chairman and the President as specified in the importance of roles and responsibilities of the independent topic of CG Code on page 150. directors as the essential part that constitute the sufficient checks 3.6 The Board of Directors has appointed 7 respective and balances on the structure and management of the Board committees: The Board of Directors, the Risk Oversight Committee, of Directors. Each Independent Director is capable of providing the Audit Committee, the Nomination and Remuneration independent and controversial expression of opinions or other Committee, the Corporate Governance and Social Responsibility observations on agenda items under consideration in the Board Committee, the Compliance Committee and the Independent of Directors meeting, with the intention to defend rights and Director Committee. The committees are appointed to study protect benefits of minor shareholders and other stakeholders, and filter related matters as needed, particularly in case of as well as contributing to the implementation of good corporate judgement with non-discrimination to ensure the Board’s greater governance of the Bank. The Bank’s Independent Director efficiency and effectiveness in performing its duty. The term of Committee originally has its directorship roles and responsibilities. office of the Director must comply with the respective committee However, the Board of Directors has enhanced the duty and charters. The Bank disclosed information about roles and performance of the Independent Director Committee to work responsibilities of the Board of Directors and respective committees in a panel like other Committees of the Bank and formulated and the number of the meetings and the attendance of each the Independent Director Committee Charter in which further director, including the report of the respective committees’ qualifications and the term of office, including roles and performance and annual report. According to the Charter of responsibilities are specified. The Bank provided the details of the Board of Directors, the directors shall participate in at least Annual Report 2020 165

75 percent of total meetings of the Board of Directors and Assessment Process shareholders in each year, except as necessary. In 2020, 1) The Nominating and Remuneration Committee all directors complied with the charters. reviewed assessment form to be accurate, complete and cover 3.7 The Bank has established guidelines of holding all issues that regulators specified and in accordance with good director positions in other companies in accordance with corporate governance principles. the regulations prescribed by the notifications of the Bank of Thailand 2) The Secretary of the Board of Directors submitted and principle of good corporate governance. Details are namely; assessment forms to the Board of Directors. members of the Board of Directors are required to hold a position 3) Secretary of the Board of Directors collected as a president, executive director or authorized director in assessment forms, summarized their results and reported them no more than 3 business conglomerates; and to serve as directors to the Board of Directors. in no more than 5 domestic and overseas listed companies. 4) The Board of Directors analyzed assessment The Bank disclosed information on directorship in other companies results and defined ways to improve their performance. to shareholders on pages 19-25. 5) The Bank disclosed the assessment of the Board 3.8 The Board of Directors supervises to have of Directors in the Annual Report a framework and mechanism for overseeing the adequacy of The objective of the Board of Directors’ policies and operations of the subsidiary and associated company self-assessment focuses on assessments that can reflect operational for each business investment. This information is disclosed in efficiencies and to consider the appropriateness of the topic of Supervision of the Subsidiary and Associated Company the composition of the Board of Directors by using the assessment Operations on page 148. results and the skill matrix of the Board of Directors to develop 3.9 According to the Charter of the Board of Directors, the Board of Directors’ corporate governance enhancement the Board of Directors oversees to ensure the performance plan, both short-term and long-term. assessment of the Board of Directors as a whole, self-assessment The performance assessment is categorized into and cross assessment of directors twice a year. The assessment 3 types, namely that of the Board as a whole, that of each individual results are reviewed to find ways to improve their performance director as a self-assessment, and that of each individual director and consider the appropriate composition of the Board of as a cross assessment. The assessment topic are as follows: Directors. In this regard, the Board of Directors may seek external a. Performance assessment of the Board as a whole: consultants or experts to assist in formulating guidelines There are 6 topics for assessment, namely or suggesting performance assessment of the Board of Directors. (1) Structure and qualifications of the Board of At the present, the Bank has not provided external consultants Directors to help establishing guidelines and raise recommendations for (2) Roles, duties and responsibilities of the Board of performance evaluation of the Board of Directors as the Bank Directors has an appropriate system for evaluating the performance of (3) Practices guidelines for the Board of Directors the Board of Directors as follows: (4) Communication of the Board of Directors - There are performance assessments of the Board of (5) Relationship between the Board of Directors and Directors with criteria comparable to the principles/ the Management recommendations of regulators such as the Bank of Thailand, (6) Preparation and conduct of the meetings the Securities and Exchange Commission, Thailand, the Stock Self-Assessment of the Board of Directors in 2020 Exchange of Thailand and organizations that oversee good from January to December 2020 is summarized by the overall corporate governance, namely the Thai Institute of Directors assessment results in 6 aspects as an excellent average score. (IOD)., the Securities and Exchange Commission, the Thai Institute The overall assessment result is summarized that there was of Directors. an appropriate number of the members of the Board of Directors - There is a periodic review of the evaluation as for the size of the business. There were a number of members of appropriate, which shall be approved by the Nomination and Independent Directors in compliance with the standard criteria Remuneration Committee. set by the supervisory authority. In addition, the committees are - There is a disclosure of the performance evaluation of also appointed in accordance with good corporate governance the Board of Directors in the annual report annually. practices for studying and scrutinizing specific work which is • Performance Assessment of the Board of Directors sufficient to take care of important issues in order to be able to The Bank has provided self-assessment of the Board conduct business carefully. of Directors in order to evaluate efficiency of the Board of Directors in compliance with the principles of good corporate governance. The self-assessment shall be held twice a year, which are in January-June and July-December. 166

b. Performance assessment of each individual • Performance Assessment of Sub-committee director as a self-assessment: The Bank conducts an assessment of the committees, There are 6 topics of assessment, namely: namely the Board of Executive Directors, the Risk Oversight (1) Distinction of proficiency Committee, the Audit Committee, the Nomination and (2) Independence Remuneration Committee, the Corporate Governance and Social (3) Preparation for undertaking missions Responsibility Committee, the Compliance Committee and the (4) Attentively perform duties within his/her scope Independent Committee once a year in order to assess the of roles and responsibilities operational efficiency of every committees. (5) Performance of duties and Assessment Process (6) Having vision to create value in long term 1) Sub-committees prepare and review the Assessment of the individual member of the Board assessment form in accordance with good corporate governance of Directors (Self-Assessment) in 2020 from January to December and guidelines for operations of sub-committees. 2020 is summarized by the overall assessment results in 6 aspects 2) Secretary of the sub-committee submit as an excellent average score. The overall assessment result assessment forms to the sub-committee. is summarized that the Board of Directors performed their duties 3) Secretary of the sub-committee collects with responsibilities, carefulness, honesty as well as in compliance assessment forms, summarizes their results and reports them to with the law, objectives and regulations of the Bank, including the sub-committee. the resolution of the shareholders’ meeting. The Board of Directors 4) The sub-committee analyzes assessment results provided opinions and recommendations based on best practices and determines guidelines for development and improvement for the benefit of the Bank and regularly attended the meetings of operations to be more efficient as well as submitting the of the Board of Directors and sub-committees. assessment results to the Secretary of the Board of Directors. c. Performance assessment of each individual 5) Secretary of the sub-committee reports the director as a cross assessment: results of the sub-committee to the Board of Directors. The Board There are 6 topics of assessment, namely: of Directors uses the evaluation results as a framework for review (1) Distinction of proficiency of the duties, problems and obstacles as well as analyzing the (2) Independence performance of the Board of Directors for operational (3) Preparation for undertaking missions development including the suitability of the composition of the (4) Attentively perform duties within his/her scope sub-committee. of roles and responsibilities The assessment results of all sub-committees in 2020 (5) Performance of duties and were in excellent level. (6) Having vision to create value in long term 3.10 The Board of Directors oversees that each member Assessment of the individual member of the Board of the Board of Directors has knowledge and understanding of Directors (Cross assessment) in 2020 from January to December about the roles, duties, nature of business and laws related to 2020 is summarized by the overall assessment results in 6 aspects the Bank’s business operations. There shall be an orientation for as an excellent average score. The overall assessment result new members of the Board of Directors in order that a new is summarized that the Board of Directors performed their duties member acknowledges information about the Bank such as with responsibilities, carefulness, honesty as well as in compliance business plans, products and services, shareholder and capital with the law, objectives and regulations of the Bank, including structure, organization structure and legal issues that he/she the resolution of the shareholders’ meeting. The Board of Directors should know for performing duties of a member of the Board of also had a high degree of independence in responsibility to Directors as the Board of Directors for the listed company. the Bank’s stakeholders. There were no practices that may lead • Directors Orientation to conflicts of interest with the Bank and no disclosure of internal The President and the secretary to the Board of information or use of internal information for personal or other Directors presented various key topics and Director’s manual in persons’ benefits. the orientation as follows: In addition, according to the Good Corporate 1) The Bank’s strategy and business operation Governance Code, the Board of Directors requires every • KTB’s Strategy sub-committee conducting a self-assessment at least once a year • Credit Principles and report the assessment results to the Board of Directors for 2) Vital information for the Board of Directors acknowledgment as well. • Organization Structure • Structure and scope of responsibilities of the Board of Directors and Sub-Committees Annual Report 2020 167

• Schedule for the Board of Directors’ Meeting Academy, Capital Market Academy without the management and the standard regular agenda There was a member of the Board of Directors proposed to the Board of Directors who attended the program, namely Mr.Thanwa Laohasiriwong. • Meeting guidelines of the Board of Directors 2. Role of Chairman Program (RCP), Thai • Information notification of the Board of Institute Of Directors (IOD) Directors and relevant persons There was a member of the Board of Directors • Shareholdings or trading that affect who attended the program, namely Mr. Poonnis Sakuntanaga the Director qualifications of the Board of Directors 3. IT Governance and Cyber Resilience Program • Director guidelines on actions that affect (ITG), Thai Institute of Directors (IOD) the Director qualifications of the Board of Directors (Yes & No) There was a member of the Board of Directors • Document review process for adding into who attended the program, namely Ms. Patricia Mongkhonvanit the agenda of the Board of Directors/Executive Directors 4. Financial Statements for Directors (FSD), Thai • Shareholder and capital structure and Institute Of Directors (IOD) dividend payment policy There was a member of the Board of Directors • Important documents of the Bank, such as who attended the program, namely Ms. Patricia Mongkhonvanit certificates by the Ministry of Commerce, the memorandum of 5. Executives Training and Development association of the Bank, regulations of the Bank, etc. Program, Royal Thai Police 3.11 The Board of Directors uses the results of the Board There was a member of the Board of Directors who of Directors assessment analysis and the guidelines according to attended the program, namely Mr. Payong Srivanich the strategies of the Bank in establishing guidelines for enhancing (2) Seminar skills (Skill Matrix), knowledge as well as the development of Workshop on Cyber Resilience by the Bank of the board of Directors, aiming for effective Board of Directors. Thailand, in cooperation with the Securities and Exchange Secretary of the Board of Directors shall coordinate with relevant Commission (SEC) and the Office of Insurance Commission (OIC) authorities in the private and public sector for both onshore and There were 4 members of the Board of Directors who offshore. Moreover, training programs and activities such as study attended the seminar, namely; visits, exchanges of knowledge and experiences on the Bank’s - Mr. Thanwa Laohasiriwong strategy and important technology are provided to the Board - Mr. Poonnis Sakuntanaga of Directors in order that the Board of Directors can bring in - Prof. Dr. Kittipong Kittayarak the unique knowledge and technology of new finance and trade - Ms. Patricia Mongkhonvanit to apply to the business operation of the Bank, leading to (3) Study visit (There were travel restrictions during proactive change and ability to compete with future competitors. the COVID-19 outbreak) • The Board of Directors’ corporate governance There was a study visit at Microsoft Singapore Pte. enhancement plan Ltd. about digital & culture transformation in the Republic of The Board of Directors had a policy of taking the Singapore in February 2020 opinions, suggestions of the Board of Directors and the skills and - Mr. Krairit Euchukanonchai expertise (Skill Matrix) of the Board of Directors both through - Mr. Payong Srivanich educational qualifications and work experience in line with the (4) Roaming meetings and visits to operations, Bank’s strategy as well as preparing the Board of Directors’ including businesses of the Bank’s customers corporate governance enhancement plan. It consists of 4 types There were customer visits and branches visits in of operational plans as follows: Phuket, Phang Nga and Chiang Mai in August and October 2020 (1) Training - Mr. Krairit Euchukanonchai (2) Seminar The Corporate Governance and Social Responsibility (3) Study visit Committee (Roaming) Meeting no. 1/2020 on September 21, (4) Roaming meetings and visits to operations, 2020, in which the progress of the Krungthai Loves Community including businesses of the Bank’s customers Project and the Sustainable Krungthai Initiative has been • Performance in accordance with the Board of monitored. Moreover, there was a visit at Buriram regional office. Directors’ corporate governance enhancement plan for 2020 The members of the Board of Directors who attended the roaming (1) Training meeting are as follows: There were 4 members of the Board of Directors - Prof. Dr. Kittipong Kittayarak who attended the training with a total of 5 programs. - Mr. Thanwa Laohasiriwong 1. Top Executive Program of the Capital Market - Mr. Vichai Assarasakorn - Ms. Patricia Mongkhonvanit - Ms. Nitima Thepvanangkul 168

The internal training courses that all Directors attended are as follows:

Name of the Board of Directors Training Program and Class

1. Mr. Krisada Chinavicharana 1. Class 54, National Defence Course, National Defence College 2. Class 186/2014, Director Certification Program (DCP), Thai Institute Of Directors 3. Project of Senior Executives Improvement, Office of the Civil Service Commission, 2010 4. Financial Instrument and Market, Harvard Business School

2. Mr. Krairit Euchukanonchai 1. Class 16/2007, Role of Chairman Program (RCP), Thai Institute Of Directors 2. Class 59/2005, Director Certification Program (DCP), Thai Institute Of Directors 3. Top Executive Program in Energy Literacy,Thailand Energy Academy

3. Mr. Vichai Assarasakorn 1. Class 22, National Defence Course for the Joint State-Private Sectors, The National Defence College 2. Class 215/2016, Director Certification Program (DCP), Thai Institute Of Directors 3. Class 7/2016, Top Executive Program in Energy Literacy, Thailand Energy Academy 4. Class 8/2015, Top Executive Program in Commerce and Trade (TEPCoT), Commerce Academy, University of the Thai Chamber of Commerce 5. ASEAN Executive Management Programme, Year 2013, Sasin Graduate Institute of Business Administration of Chulalongkorn University (Sasin) 6. Class 12/2011, Top Management Program, Capital Market Academy, The Stock Exchange of Thailand 7. Cybersecurity, Cyber Resilience & Privacy Risk in the Era of Digital Transformation, Year 2018, ACIS Professional Center Annual Report 2020 169

Name of the Board of Directors Training Program and Class 4. Mr. Thanwa Laohasiriwong 1. Class 60, National Defence Course, National Defence College 2. Class 45/2019, Role of the Chairman Program (RCP), Thai Institute of Directors 3. Class 2/2017, Boardroom Success through Financing and Investment (BFI), Thai Institute Of Directors 4. Class 2/2016, Driving Company Success with IT Governance (ITG), Thai Institute Of Directors 5. Class 20/2015, Advanced Audit Committee Program (AACP), Thai Institute Of Directors 6. Class 1/2015, Ethical Leadership Program (ELP), Thai Institute Of Directors 7. Class 22/2014, Successful Formulation & Execution of Strategy (SFE), Thai Institute Of Directors 8. Class 10/2004, Finance for Non-Finance Directors (FND), Thai Institute Of Directors 9. Class 43/2014, Director Certification Program (DCP), Thai Institute Of Directors 10. IBM/Harvard Management Development Program Year 2001 11. IBM/INSEAD Management Development Program Year 1998 12. Environmental Governance for Executive Officer, Class 4/2016, Department of Environmental Quality Promotion (DEQP), Ministry of Natural Resources and Environment 13. Cybersecurity, Cyber Resilience & Privacy Risk in the Era of Digital Transformation Year 2018, ACIS Professional Center 14. Class 20/2019, Corporate Governance for Director and Top Management of State Owned Enterprise and Public Organization Course (PDI), King Prajadhipok’s Institute 15. Class 13/2019, Top Executive in Energy Expertise, Thailand Energy Academy 16. Class 3/2019, Executive Program on Rule of Law and Development (RoLD), Thailand Institute of Justice 17. Class 30/2020, Top Executive, Capital Market Academy, The Stock Exchange of Thailand 18. Cyber Resilience, The Bank of Thailand (2020) 170

Name of the Board of Directors Training Program and Class 5. Prof. Dr. Kittipong Kittayarak 1. Class 49, National Defence Course, National Defence College 2. Class 112/2014, Director Accreditation Program (DAP), Thai Institute Of Directors 3. Class 18/2015, Advanced Audit Committee Program (AACP), Thai Institute Of Directors 4. Class 1/2013, Certificate in Law for Democracy, Office of the Constitutional Court 5. Class 1/2012, Top Executive Program in Energy Literacy, Thailand Energy Academy 6. Class 8/2009, Top Management Program, Capital Market Academy, The Stock Exchange of Thailand 7. Class 10/2006, Top Executive Program in Justice Administration, Judicial Training Institute 8. Class 5/2001, Politics and Governance in Development Systems or Executive Course, King Prajadhipok’s Institute 9. Cybersecurity, Cyber Resilience & Privacy Risk in the Era of Digital Transformation, Year 2018, ACIS Professional Center 10. Cyber Resilience, The Bank of Thailand (2020) 6. Mr. Teerapong Wongsiwawilas 1. Class 246/2017, Director Certification Program (DCP), Thai Institute Of Directors 2. Class 57, National Defence Course, National Defence College 3. Class 8, Top Executive Program, Office of the Civil Service Commission (OCSC) 4. Class 12, Public Administration and Law for Executive, King Prajadhipok’s Institute

7. Gen. Tienchai Rubporn 1. Class 240/2017, Director Certification Program (DCP), Thai Institute Of Directors 2. Class 22/2016, Advanced Audit Committee Program (AACP), Thai Institute Of Directors 3. Class 3/2016, Ethical Leadership Program (ELP), Thai Institute Of Directors 4. Class 2/2016, Driving Company Success with IT Governance (ITG), Thai Institute Of Directors 5. Class 15/2016, Corporate Governance for Capital Market Intermediaries (CGI), Thai Institute Of Directors 6. Class 28/2016, Successful Formulation & Execution of Strategy (SFE), Thai Institute Of Directors 7. Class 28/2015, Financial Statements for Director (FSD), Thai Institute Of Directors 8. Class 121/2015, Director Accreditation Program (DAP), Thai Institute Of Directors 9. Class 47, Security Studies Program, Royal Thai Army War College 10. Resource Management Introductory Course, United States Army Finance School Fort Benjamin Harrison, Indiana, United States of America 11. Planning, Programing Budgeting, Execution System Course, United States Army Finance School Fort Benjamin Harrison, Indiana, United States of America 12. Cybersecurity, Cyber Resilience & Privacy Risk in the Era of Digital Transformation, Year 2018, ACIS Professional Center Annual Report 2020 171

Name of the Board of Directors Training Program and Class 8. Mr. Poonnis Sakuntanaga 1. Class 46/2020, Role of the Chairman Program (RCP), Thai Institute of Directors 2. Class 10/2019, IT Governance and Cyber Resilience Program (ITG), Thai Institute of Directors 3. Class 7/2017, Ethical Leadership Program (ELP), Thai Institute Of Directors 4. Class 8/2017, Risk Management Program for Corporate Leaders (RCL), Thai Institute Of Directors 5. Class 27/2016, Successful Formulation & Execution of Strategy (SFE), Thai Institute Of Directors 6. Class 113/2009, Director Certification Program (DCP), Thai Institute Of Directors 7. Class 4, Corporate Governance for Director and Top Management of State Owned Enterprise and Public Organization Course, Public Director Institute (PDI), King Prajadhipok’s Institute 8. In house Training Programs, Citibank 9. Asian Banking and Sovereign Conference 2006 by Moody 10. Regional Workshop “Risk Modeling for Sovereign Debt Portfolio” by World Bank 11. Cybersecurity, Cyber Resilience & Privacy Risk in the Era of Digital Transformation Year 2018, ACIS Professional Center 12. Year 2019, Cyber Resilience Program, the Bank of Thailand 13. Year 2020, Cyber Resilience Program, the Bank of Thailand 9. Ms. Patricia Mongkhonvanit 1. Class 43/2020, Financial Statements for Directors (FSD), Thai Institute Of Directors 2. Class 13/2020, IT Governance and Cyber Resilience Program (ITG), Thai Institute Of Directors 3. Class 159/2019, Director Accreditation Program (DAP), Thai Institute of Directors 4. Class 274/2019, Director Certification Program (DCP), Thai Institute of Directors 5. Future Economy and Internet Governance – Executive Program, Future Economy and Internet Governance (FEGO) 6. Top Management Program, Capital Market Academy 7. Year 2019, Exponential Manufacturing Thailand Program, The Federation of Thai Industries 8. Year 2019, Cyber Resilience Program, the Bank of Thailand 9. Year 2020, Cyber Resilience Program, the Bank of Thailand 172

Name of the Board of Directors Training Program and Class 10. Ms. Nitima Thepvanangkul 1. Class 34/2019, Advanced Committee Program (AACP), Thai Institute of Directors 2. Class 3/2016, Ethical Leadership Program (ELP), Thai Institute of Directors 3. Class 18/2015, Anti Corruption: The Practical Guide Program (ACPG), Thai Institute of Directors 4. Class 3/2014, Risk Management Committee Program (RMP), Thai Institute of Directors 5. Class 126/2009, Director Certification Program (DCP), Thai Institute of Directors 6. Class 24/2017 Top Executive Program, the Capital Market Academy, the Stock Exchange of Thailand 7. NIDA - Wharton Executive Leadership Program, The Wharton School, University of Pennsylvania, United States of America 8. PTT Executive Leadership Program, General Electric Crotonville, New York, United States of America 9. Year 2019, Cyber Resilience, the Bank of Thailand

11. Mr. Lavaron Sangsnit 1. Class 58, National Defence Course, National Defence College 2. Class 205/2015, Director Certification Program (DCP), Thai Institute of Directors 3. Class 12/2018, Top Executive Program in Energy Literacy, Thailand Energy Academy 4. Class 25/2017, Top Management Program, Capital Market Academy 5. Class 7, Top Executive Development: Government Administrators, Office of The Civil Service Commission

12. Mr. Payong Srivanich 1. Class 223/2016, Director Certification Program (DCP), Thai Institute Of Directors 2. Cybersecurity, Cyber Resilience & Privacy Risk in the Era of Digital Transformation Year 2018, ACIS Professional Center 3. Executives Training and Development Program, Royal Thai Police 4. TIJ Executive Program on the Rule of Law and Development : RoLD 2019, Thailand Institute of Justice Annual Report 2020 173

At the meeting of the Board of Directors no. 24/2020 (1049) on November 25, 2020, there was a consideration on approval of the Board of Directors’ corporate governance enhancement plan for 2021 and for the long-term plan 2022 - 2023 as proposed, the key issues were summarized as follows: • The Board of Directors’ corporate governance enhancement plan for 2021 and for the long-term plan 2022 - 2023 It was implemented in compliance with the Board of Directors’ corporate governance enhancement plan 2020 guidelines, using the analysis of the Board of Directors’ performance assessment which the Board of Directors has jointly considered, including the Board of Directors’ skill matrix to establish guidelines for enhancing skills, knowledge and development of Directors in order to have the skill matrix in line with the Bank’s mission and strategy as well as strengthening effective Board of Directors. It consists of 4 types of operational plans as follows:

Type Details 1. Training • Top Executive Program of the Capital Market Academy, Capital Market Academy • Top Executive Program in Energy Literacy,Thailand Energy Academy • Training programs hosted by Thai Institute Of Directors (IOD) (The curriculum content is updated to be up-to-date, appropriate and accommodate future changes.) For examples, - Director Accreditation Program (DAP) - Director Certification Program (DCP) - Financial Statements for Directors (FSD) - Role of the Chairman Program (RCP) - Board Nomination and Compensation Program (BNCP) - Risk Management Program for Corporate Leaders (RCL) - Advanced Audit Committee Program (AACP) - Board Matters and Trends (BMT) - Successful Formulation & Execution of Strategy (SFE) - Ethical Leadership Program (ELP) - IT Governance and Cyber Resilience Program (ITG) 2. Seminar • Cyber Resilience workshops hosted by the Bank of Thailand 3. Study visit • There were study visits to prepare to become the digital platform leader in driving technology business and to operate a special business in the future such as virtual banking, digital lending and data services, etc., including the goal of becoming the one of major cloud providers in Thailand. 4. Roaming meetings and visits to • Activities of the Board of Directors (Roaming) to allow the Bank’s Board of Directors to visit operations, including businesses the branches of the Bank and call a meeting with the executives in the area to of the Bank’s customers acknowledge the results, problems and obstacles in the operations, as well as visiting the businesses of the Bank’s customers. - Bangkok and metropolitan area - Central Thailand area - Northern Thailand area - Northeastern Thailand area - Eastern Thailand area - Southern Thailand area 174

3.12 In order that the Board of Directors fully performed meetings approved by the Board of Directors to make them its duties and accessed necessary information, the Board of available for inspection. Directors appointed Mr. Payong Srivanich, the President to be 3.14 The Board of Directors has a policy to oversee the the company’s secretary as detailed in the topic of Management management in accordance with good corporate governance Structure on page 97. principles. As a result, the policy requires the Board of Directors 3.13 The Bank’s regulations, Clause 31 stated that the to hold a meeting without the presence of the Management Board of Directors shall hold meetings at least once a month. at least once a year. Additionally, the Committee encourages In 2020 and 2021, the meeting of the Board of Directors was independent directors to have the opportunity to meet among scheduled every Wednesday in the second and fourth week of themselves as necessary in the form of a panel to discuss interested the month. The secretary of the Board was assigned to set issues of the management. Later, the summary of their opinions a schedule and standard agendas for each monthly meeting in each meeting must be reported to the President. The Charter stipulated in advance for the whole year and publicized of the Independent Director Committee specifies the Committee the meeting schedule in advance through the Bank’s intranet to hold the meeting at least twice a year. In 2020, there were in order that directors can arrange their schedule and attend 3 meetings of the Board of directors without the presence of the the meetings. Moreover, the Bank’s regulations, Clause 32/1 stated management and 4 meetings of the Independent Director that the Board of Directors is able to attend the meeting through Committee. electronic media, which must meet the criteria. That is 3.15 The Bank proposes directors’ remuneration in every an additional channel for the meeting of the Board of Directors. form in the shareholder general meeting to consider approving According to the Charter of the Board of Directors, every director annually. In this regard, the Bank shall not provide any privilege is required to attend no less than 75 percent of the total number compensation beyond the approval form the shareholder of meetings in each fiscal year, unless it is reasonably absent. meeting. The Nomination and Remuneration Committee has Any director who has interests in any matter shall not cast a vote a duty to consider director’s remuneration to be in accordance on such matters. In such a case, the Chairman may request with the appropriateness and commensurate with directors’ the director to leave the meeting temporarily. In 2020, there were scope of duties and responsibilities; the Bank’s financial status 26 Board of Directors meetings, in which more than 81% of comparable to other listed companies in the Stock Exchange of the Bank’s directors attended every meeting. Each director of Thailand and the commercial banks at the same level of business the Bank has an average of 88% of the attendance at the meetings. group. Details are disclosed in the topic “Management Structures” The Bank has disclosed details on the number of meetings and on page 99. attendance of each director in the topic of the Board of Directors meeting on page 98. In this regard, the subcommittee related Principle 4 Ensure Effective CEO and People to the agenda for such a particular issue will review the relevant Management information; make comments and suggestions before proposing 4.1 Policy Determination and Management Supervision to the Chairman of the Board of Directors for approval and The Board of Directors perform its duties with inclusion of that issue on the agenda for prudence and risk consciousness to protect the interests of shareholders with honesty management in all respects that may arise. The Bank has classified and prudence especially in approving the vision, mission, strategy, the agenda into clear categories, such as the Chairman’ s Report, and approval of important issues related to the direction and Approval of Minutes of the Previous Meeting, Matters Arising, policy of the Bank including a business plan and annual budget Policies, Credits, Debt Restructuring, Investments, Buying/Selling by using principle of rationality and analyzing business Assets and Procurement, Human resources, Matters of Report environment, environment and society carefully. At the end and Any Other Business in order to hold meetings efficiently. of the 2nd quarter of each year, the Board of Directors shall hold In addition, the Board of Directors has the policy for the President a meeting to review the Bank’s policies and goals and shall to invite top executives to attend the meeting so that they are establish the Bank’s business plan of the next year in the last provided additional information as a person directly related to quarter in order to pass on to the management for brainstorming the problem. According to the regulations of the Bank, Clause with the executives of every department and every branch 30, the meeting invitation must be sent to the director not in the country to determine effective operational strategies in order less than 7 days prior to the meeting date, except for an urgent case to achieve the same goal. in order to maintain the right or interest of the company, a notice For good corporate governance, the Board and relevant for the meeting may be made by other means and the date of executives shall have an integrated management (GRC: the meeting may be earlier fixed. Previously, the Bank has sent Governance Risk & Compliance) and corporate governance invitations to the Board of Directors in time every time. The compliance. The management process and operations must be secretary will write minutes and keep written minutes of the Board connected together and it is required to have responsible person Annual Report 2020 175

for each step clearly, from the level of strategic planning / person through the consideration by the specific Committee strategic plan / business plan of the Bank, product launch policies appointed. determination, tools development, processes and procedures 2. Group Head and Sector Head: The Bank has to support the implementation of the Bank’s plans and policies considered the nomination and selection of suitable candidates including results follow up. In addition, the Board also controls especially the President, Human Resources and Corporate and monitors the management of the management to be Governance Group and relevant executives from the successor transparent and in accordance to the Code of Conduct as well as pool and talent pool. The Bank focuses on giving executives the supervising internal control and risk management in order to opportunities to rotate their jobs according to the principles of ensure the appropriateness. Mobility and Diversity for learning new jobs and expanding 4.2 The Board of Directors assigned the Nomination their potential as well as regularly developing themselves, which are and Remuneration Committee to ensure that the President and beneficial to the Bank’s operation and effective management. top executives possess the knowledge, skills, proficiency (Skill The Bank shall appropriately propose persons who will replace Matrix), experience, and characteristics necessary for the positions to the Nomination and Remuneration Committee the organization to achieve its objectives as detailed in the topic and the Board of Directors for an approval. of Nomination and Appointment of Directors and Executives on 3. Department: The Bank prepares readiness of page 148. personnel by making a succession plan. Each department shall 4.3 Charter of the Board of Directors states that duties propose information of qualified successor to Sector Head and and responsibilities of the Board of Directors that the board should Group Head to consider selecting a qualified successor, including ensure succession plan and development plan for top executives making clear individual development plan. After that, qualified to possess the knowledge, skills, proficiency, experience, and successor shall be recruited for vacant position as specified characteristics necessary for the organization to achieve in the Bank’s regulations. its objectives, including providing efficient performance assessment 4. Regional Office and Business Office: The Bank prepares of the President and top executives annually. The board ensures readiness of Regional Office Manager and Business Office Manager remuneration structure in line with organization culture regarding by recruiting from the successor pool. Staff committee of the Group risks, prudent and transparent system of remuneration for shall jointly consider recruitment criteria and provide written examination top executives in accordance with their duties and responsibilities and interview. Assessment Center ensures that supervisors from 2 levels and performance complying with the Bank’s financial shall assess suitability and readiness for position and considers selecting performance in both short and long term. The detail of recruitment the adequate amount of successor as specified in succession plan of the president and top executives is disclosed in the topic of and future business expansion plans by reviewing successor pool Nomination and Appointment of Directors and Executives on annually. page 145. 5. Branch: The Bank prepares readiness for Branch Manager by recruiting from the successor pool. Staff committee Succession Plan of Retail Banking Sales & Distribution Group shall jointly consider The Board of Directors assigned the Nomination and recruitment criteria and provide written examination and Remuneration Committee to be responsible to scrutinize and interview. Assessment Center ensures that supervisors from 2 levels develop the succession plan to possess continuity and conform shall assess suitability and readiness for position and considers with the business strategy of the Bank. The process is to ensure selecting the adequate amount of successor as specified that the Bank has a succession plan for recruiting, selecting and in succession plan and future business expansion plans by reviewing grooming executives at each level that is a critical position. successor pool as deemed appropriate annually. The Bank prepared the one who will be executive or manager through Furthermore, the Bank selects and creates a potential competency gap analysis so that the Bank can provide employee group, consisting of the Bank’s scholarship students appropriate training and potential development in order to and high potential employees to develop new executives and formulate a career path roadmap and succession pool for prevent the shortage of high potential employees who will be efficient succession. The Bank has clear plan and criteria on executives in the future. selecting successor, covering executives at all levels as below: 4.4 The Board of Directors has a policy to encourage 1. The President: The Bank had a transparent the President and top executives including employees to be recruitment and selection process by recruiting from internal trained and developed in order to increase knowledge and executives and giving opportunity to outsiders with knowledge experience that is beneficial to their operations. The Bank assigned and capability, including experience in managing large Krungthai Academy Department to be responsible for training organizations and vision to apply for the position of President. and development of employees and executives as well as The Bank has a recruitment process to select for the appropriate gathering needs for the development of executives and 176

employees, the Bank’s strategic plan and executives’ policies Technology Disruption era. Meanwhile, the Bank must take into in order to define the Bank’s human resources development plan consideration to operate business with awareness on covering all necessary dimensions for the Bank’s business the environmental, social and governance (ESG) principle. The Board operations. This is an enhancement of working skills and of directors places importance on fostering organizational culture new knowledge as well as upskilling and reskilling of employees that promotes innovation and supervises Management to use in order that the high level of executives and employees can it as a part of reviewing the Bank’s strategy, planning operation operate their jobs efficiently and effectively in a sustainable improvement and promoting innovation creation in order to add manner. value to the business in line with the changing environment 4.5 Director Positions in Other Companies conditions with details as described in the Overview of the Bank’s 1) President: Operation and Progress of Objective Plans in 2020 on page 40. The President can take the Director position in other Additionally, the Bank also joined in cooperation with partners companies, which shall not interfere with the exercise of to design and develop products and services continually. performance/duties as the President of the Bank, and must not 5.2 The Board of Directors encourages the Bank engage the Bank or the position in the Bank in connection with to execute Responsible Lending, which is an approach in operating that business. In this regard, the restriction on being a Director banking business for tangible and efficient sustainable banking in companies listed on the Stock Exchange of Thailand, both in by creating a corporate culture that focuses on long-term growth the country and abroad, is limited to not more than 5 companies rather than short-term returns. This approach has taken into (including the Bank but excluding the companies acquired consideration the risk in various aspects, including environmental, through debt restructuring). The Office of the President must social and governance (ESG) features. Primarily, the Bank shall submit for further approval from the Board of Directors. The consider matters of ESG risk management for lending. For example, information of director position in other companies shall be the Bank shall determine Responsible Lending Strategy and disclosed to shareholders in the Annual Registration Statement establish guidelines for managing credit portfolios that contain (Form 56-1) and the Annual Report (Form 56-2). risk of ESG. The Bank shall analyze both positive and negative 2) Other Positions of Employees: impacts or the impact on the stakeholders arising from lending To comply with the employee’s regulations of the or the customers of the Bank, and consider all aspects covering Bank. ESG issues beyond those required by law because the impact 4.6 The Bank disclosed top executives’ remuneration on some matters has not been defined by law in order to support in the topic of Management Structure on page 105 The Bank the concrete ESG implementations. managed top executives’ remuneration in compliance with 5.3 The Board of Directors has emphasized its performance in both short and long term and assessed the importance of overseeing the organization management in order performance with Balanced Scorecard. Currently, the Bank to balance the benefits of all stakeholders and defined it as manages its human resources using performance driven a practice in corporate governance policy approved by the Board organization model and develops a performance management of Directors. Moreover, in order that treatment of various groups system, which plans, tracks and appraises performance of stakeholders is in the same way and employees and normal in alignment with the Bank’s business strategies and in relation to persons know the channels to express opinions and engage both short-term and long-term remuneration that is suitable to in the Bank’s operations, the Bank has issued a guideline for role the job description and capability of the management and and participation of stakeholders and promulgated it throughout all employees in the organization. In this regard, the Bank has clearly the organization since 2018. The detail of treatment of stakeholders defined the process, method and procedure for performance is disclosed in the topic of Consideration for Role of Stakeholders assessment of the President as detailed in the topic of on page 196. Management Structure on page 103. 5.4 The Board of Directors approved the policy on social 4.7 The Board of Directors supports human resource and environmental responsibility in order to announce the intention management in line with the direction and strategy of the bank. to conduct business with social and environmental responsibility Employees at all levels have knowledge and ability, including under the vision Growing Together for Sustainability, aiming to appropriate motivation as well as being treated fairly. The Bank develop personnel’s potential to support growth and wealth for has established a provident fund in order to ensure that customers and better quality to society and environment as well as its employees have sufficient savings for their retirement. the sustainable returns to shareholders. The Bank acts as a financial institution that is alongside Thai people by providing financial services Principle 5 Nurture Innovation and Responsible Business to people at all levels, helping customers and Thai people in every 5.1 The Board of Directors delivers policy to the Bank crisis, along with encouraging strong growth of Thai economy. regarding the important mission in driving the country’s economy, Previously the Bank supported several government projects, for along with creating business growth to step into a full range of instance, the Student Loan Fund, EDC machines installation to Digital Banking that can satisfy all lifestyles of customers in the Pracharat Blue Flag Shops nationwide, “Chim Shop Chai” (Taste- Annual Report 2020 177

Shop-Spend) campaign, etc. In 2020, the Bank provided more Krungthai) project by using Inside out blasting process. The Bank projects, for example, “Khon La Khrueng” (Let’s Go Halves) scheme, also adheres to a market conduct principle in operation. Rao Tiew Duay Kan” [We travel together] scheme, etc. More details Moreover, the Bank developed a protection mechanism covering are described in the Policy and Business Overview section, on page 40. conflicts of interest. The Bank also elevated the creation of Zero Tolerance culture by using strategies to raise awareness among Principle 6 Strengthen Effective Risk Management and employees to have morals and to comply with regulations. Internal Control The Board had established guidelines for the prevention of bribery 6.1 The Board of Directors has recognized that the bank and also continued the No Gift Policy consecutively. The Chairman is the country’s leading financial institution that gives importance of the Board of Directors and the President are the leader to risk management and systematic and effective risk control. in announcing the will to join the NO Gift Policy Project by The Committee has clearly formulated the risk management not accepting gifts on New Year 2021 and all festivals, but receiving structure, policies and guidelines for risk management as well as wishes instead. This project aimed to cultivate a good corporate established a good risk governance framework in order to support culture with integrity, morality and ethics, promote good business operations in line with the Bank’s direction and target governance and transparent operation, and oppose corruption. as detailed in the topic of Risk Factors on page 120. Lastly, it is expected that the project shall help in driving the Bank 6.2 The Board of Direetors has obviously determined to be a moral organization model so as to integrate cooperation the structure, policy and framework for risk management to envelop in the reform of the anti-corruption process. all aspects of risk management in compliance with the frameworks 6.5 The Board of Directors has approved anti-corruption prescribed by the Bank of Thailand (BOT). Thus, the Bank has and anti-bribery policy that has been regularly adjusted to be adopted the framework of the Committee of Sponsoring adequate and updated in accordance with the changing Organizations of the Treadway Commission (COSO), which is situations. The Bank has announced the latest anti-bribery and the framework specifying the structure of integrated risk management corruption policy and published on the Bank’s website. Interested (Enterprise Risk Management: ERM) under the international persons can download information by clicking the menu standard. Its main principle is to connect the risk management “Corporate Governance” and selecting “Good Corporate process with strategic planning and business opportunities of Governance” and then “anti-corruption and anti-bribery policy” the Bank in order to help integrate the administration and managing menu.” risks for the whole organization. Risk Appetite and Risk Tolerance 6.6 The Board of Directors has a policy that the Bank are determined in terms of both quantitative and qualitative has proactively implemented risk management and anti- aspects through setting as a specific value or as a range corruption policy and requires a guideline to prevent actions depending on the Key Risk Indicators used and the suitability against laws and government regulations. In 2018, the Bank has in order that the Bank can achieve its objectives and goals. issued guidelines for (1) information disclosure and transparency As a result, the Bank shall be able to set processes and guidelines (2) roles and participation of stakeholders (3) prevention of as well as use various tools in risk management and the early warning conflicts of interest and (4) prevention of receiving and giving system. Eventually, the aforementioned risk management policies bribery and corruption. The Bank has announced and strategies will add more value to the organization, the implementation of four guidelines and published further details the shareholders, including all groups of stakeholders sustainably. on the Bank’s website whereby interested persons can download 6.3 The Board of Directors stipulated a policy for them. the Bank to foster a risk management culture. The Bank has a risk 6.7 The Board of Directors sets whistle blowing policy governance structure according to the principles of 3 Lines of and gives opportunity to stakeholders to report any wrongdoing Defense, covering from the Board of Directors, the Management through various channels. Any wrongdoing including corruption, to business units, which consists of all employees. It reflected illegal, violating regulation of the Bank’s or regulators made by the organizational structure and raised the level of risk management. directors, executives, staff, employees or subsidiaries’ staff can The Risk Oversight Committee (ROC) was designated to drive be directly reported to the Chairman of the Board of Directors and oversee risks to be in accordance with the policy and through email: [email protected]. Anyhow, the name at the risk appetite level. of the whistle blower will be kept confidential and protected 6.4 The Board of Directors has determined and reviewed during the examination and after the process finished as detailed the policies/guidelines and short-term/long-term business plan in the topic of Whistleblowing and Complaints on page 158. by establishing a strategic plan for corporate governance 6.8 The Board of Directors has given importance to between 2017-2021. The Board of Directors, executives and supervision and management of Subsidiaries and Associate employees are aware of the importance of driving all forms of groups to strictly comply with the policies as detailed in the topic anti-corruption under the “Krungthai Moral Initiative” (Sustainable of Corporate Governance of Subsidiaries and Associate groups on page 148. 178

Principle 7 Ensure Disclosure and Financial Integrity 7.6 The Bank assigns the Finance Strategy Team to take 7.1 The Board of Directors has policy to encourage responsibility for providing services and disseminating news and the Bank to disclose its information in compliance with laws, information about the Bank’s activities that are beneficial to all regulations, obligations and crucial standards that the Bank has related groups. The detail of this matter is in the topic of Disclosure strictly followed as detailed in the topic of Disclosure of Information of Information and Transparency – Investor Relations on page and Transparency on page 159. Moreover, the Bank has issued 160. guidelines for information disclosure and transparency and 7.7 The Board of Directors has a policy that the Bank announced the implementation on June 22, 2018 as a practice shall disclose information as required by law and others as deemed and standard for employees at all levels in all departments in appropriate with transparency on basis of accuracy, equality both central and regional sectors. The guideline is published on and timeliness. The Bank has prepared a guideline for information the Bank’s website whereby interested persons can download them. disclosure and transparency and announced the implementation 7.2 The Board of Directors has supervised the Bank of the guideline on June 22, 2018 and publicized them on the to disclose information about financial status and operation results Bank’s website whereby interested persons can download them. according to the criteria of related regulators by submitting 7.8 All documents that the Bank has submitted through financial report on a quarter and annual basis as per the criteria and electronic news on the website of the Stock Exchange of Thailand. within the prescribed time and publicizing the report in Thai and English The Bank has published them in Thai and English versions on the version through electronic news on the website of the Stock Exchange Bank’s website every time. of Thailand and the Bank so that shareholders can access 7.9 The website of the Bank has disseminated various the report equally. However, the Bank has placed importance on information, both financial and non-financial related to the Bank the preparation of financial statements to be accurate in accordance such as vision, mission, core value, the nature of business, the with generally accepted accounting standards and choose to use names of the Board of Directors and executives, financial the appropriate accounting policy and comply with it regularly. statements, current and previous reports of financial status and The financial statements of the Bank have been unconditionally operation results, Annual Registration Statement (Form 56-1) and certified by the auditor. The Bank has never ordered to amend annual reports that can be downloaded, and other information the financial statements by the Securities and Exchange Commission as specified in descriptions of Principle 7.6 of CG Code. and never delayed submission of the financial report. 7.3 The Board of Directors has a policy for the Bank to Principle 8 Ensure Engagement and Communication prepare the Management’s explanation and analysis of financial with Shareholders status, operation results, crucial changes, including factors The Bank disclosed compliance with Principle 8 in the affecting the Bank’s financial status and operation results, and topic of Rights of Shareholders on page 153 and Equitable publicize the explanation and analysis in Thai and English version Treatment of Shareholders on page 154. through electronic news on the website of the Stock Exchange of Thailand and the Bank so that investors can access the report equally. 7.4 The Board of Directors has a policy that the Bank shall prepare a report on compliance with the good corporate governance principle on an annual basis as detailed in the topic of Corporate Governance in Annual Registration Statement and the Annual Reports. The report is publicized through electronic news on the website of the Stock Exchange of Thailand and the Bank so that shareholders can access the report equally. 7.5 The Board of Directors has a policy that the Bank shall prepare a sustainable development report in which the Bank has revealed three dimensions of sustainability in operations: economy, society and environment. Stakeholders have been informed of that since 2006. The sustainability development report 2017 is the first issue that the Bank has used the standards of Global Reporting Initiative as a framework for information disclosure of the Bank’s operations at core level, covering sustainability in operations. The Bank has published it on the Bank’s website whereby interested persons can download it. Annual Report 2020 179

Related-Party Transactions

1. Important Related-Party Transactions Apart from the Notes in the Financial Statements No. 9.27, the transactions related to individuals or companies, important information on related-party transaction of the Bank and its subsidiaries, associated and affiliated companies are shown below: The details of the Bank’s loans and obligations to its subsidiaries, associated and affiliated companies are as follows: Unit : Million Baht

December 31, 2020 December 31, 2019 The Bank’s Financial Shares held by Common Director or Statements Loans Obligations Loans Obligations the Bank Top Executive (%) The Bank’s Subsidiaries KTB Law Co., Ltd. - - - - 100.00 - KTB General Services and Security Co., Ltd. 7 21 8 1 100.00 Mr. Poonpat Sripleng Mr. Santi Parivisutt Mr. Chanchai Sinsuparatn KTB Computer Services Co., Ltd. 2,096 5 2,089 5 100.00 Mr. Tawatchai Cheevanon Dr. Polawat Witoolkollachit Krungthai Asset Management Pcl. 0 - 0 - 100.00 - KTB Advisory Co., Ltd. - - - - 76.00 - KTB Leasing Co., Ltd. 1,780 1 3,693 1 100.00 Mr. Chanchai Sinsuparatn Krungthai Card Pcl. 7,660 1 3,491 1 49.29 Ms. Praralee Ratanaprasartporn Mr. Pichit Jongsaliswang KTC Nano Co., Ltd. (1) - - - - 24.95 - KTC Prepaid Co., Ltd. (1) - - N/A N/A 24.95 - KTC Pico (Bangkok) Co., Ltd. (1) - - - - 24.95 - KTC Pico (Chonburi) Co., Ltd. (2) ------KTC Pico (Pathum Thani) Co., Ltd, (2) ------KTC Pico (Samut Prakan) Co., Ltd. (2) ------KTC Pico (Samut Sakhon) Co., Ltd. (2) ------Infinitas by Krungthai Co., Ltd. (3) - - N/A N/A - Mr. Krairit Euchukanonchai Ms. Praralee Ratanaprasartporn Dr. Polawat Witoolkollachit

Remarks : (1) The Bank directly invests 24.95% and indirectly invests 75.05% through Krungthai Card Pcl. (2) The Bank indirectly invests through KTC Pico (Bangkok) Co., Ltd., which holds 100.00% shares in the company. (3) The Bank indirectly invests through KTB Advisory Co., Ltd. which holds 100.00% shares in the company. 180

Unit : Million Baht

December 31, 2020 December 31, 2019 The Bank’s Financial Shares held by Common Director or Statements Loans Obligations Loans Obligations the Bank Top Executive (%) The Bank’s Associated Companies Krungthai Panich Insurance Pcl. 0 5 1 5 45.00 Ms. Saranya Vejakul Krungthai IBJ Leasing Co., Ltd. 5,142 2 5,739 2 49.00 Mr. Ekachai Techawiriyakul Mr. Pativate Santavanond Krungthai Zmico Securities Co., Ltd. 431(2) - 605(2) - 50.00 Mr. Poonpat Sripleng Mr. Werapong Suppasedsak Mr. Rawin Boonyanusasna Krungthai-AXA Life Insurance Pcl. 1(2) 1 - 1 50.00 Ms. Praralee Ratanaprasartporn Mr. Rawin Boonyanusasna Mr. Pichit Jongsaliswang National ITMX Co.,Ltd. (1) - - - - 19.86 Mr. Payong Srivanich BCI (Thailand) Co., Ltd. (1) - - - - 22.17 Mr. Tawatchai Cheevanon

Remarks : (1) Associated company according to the consolidate financial statement criteria, excluding from the financial business group. (2) Related-party transaction of the Bank and money market (asset)

Unit : Million Baht

December 31, 2020 December 31, 2019 The Bank’s Financial Statements Loans Obligations Loans Obligations

The Bank’s Affiliated Companies The Bank’s Affiliated Companies (in which the Bank holds more than - 13 1 19 10 percent shares) The Bank’s Affiliated Companies (in which the Bank holds more than 8,411 1 8,490 1 10 percent shares from debt restructuring) The Bank’s Affiliated Companies (with Directors or Top Executives 19,263 365 30,620 127 in common) Annual Report 2020 181

The details of the Bank’s balances of deposits, related-party transaction of the Bank and money market (debt), income and expenses from its subsidiaries and associated companies are as follows:

Unit : Million Baht

The Bank’s Financial Statements December 31, 2020 December 31, 2019 Subsidiaries Deposit 3,553 2,595 Related-party transaction of the Bank and money market (debt) 158 303 Associated companies Deposit 276 420 Related-party transaction of the Bank and money market (debt) 4,831 6,600 Subsidiaries Interest Income 123 252 Interest Expenses 12 12 Other Income 1,055 945 Other expenses 6,321 6,827 Associated companies Interest Income 77 93 Interest Expenses 117 162 Other Income 2,426 2,410 Other expenses 250 226 182

2. Policy on Pricing To prevent conflict of interest that may arise from conducting related-party transactions, the Bank has used the market price or fair price in conducting all types of transactions unless otherwise specified by the regulators.

3. Necessity and Justifications of Related- Party Transactions Related-party transactions or connected transactions conducted in 2020 were normal business transactions or support transactions for normal business of the Bank as well as were conducted under the same general trading conditions as those done with outsiders and were necessary for business operation and supporting business operation. However, the Bank has considered those related-party transactions between the Bank or subsidiaries and related persons or persons who might have conflict of interest with the Bank or subsidiaries; and found that such transactions were conducted in accordance with general nature of business. In addition, the Bank received and paid remunerations at market prices or fair prices. Such transactions were also complied with the requirements of the regulators and were disclosed accurately and completely.

4. Measures for Related-PartyTransactions Approval The Bank gives importance to prevention of conflict of interest from conducting related-party transactions or connected transactions. In approving such transactions, the Bank has carefully considered the issues with integrity, good faith, justification and independence within ethical framework, adhering to the code of conduct and good corporate governance principles of the Bank. To ensure that related-party transactions or connected transactions will be conducted in accordance with the requirements of the regulators, the Bank has assigned “the Compliance connected transactions or related-party transactions and Procedures Sector of the Compliance and Legal as required by the Securities and Exchange Commission and Management Group” to oversee and re-check the Stock Exchange of Thailand. the approval procedures of such transaction. 2) Directors having interest are prohibited from taking For any related-party transaction or connected part in approval process. If connected transactions have transaction that is required by the regulators or the Bank’s been conducted, the Audit Committee shall participate procedure to be approved by the Board of Directors, in the approval and give opinion to comply with good the Bank has formulated best practices for the Board of corporate governance and the regulations of the Stock Directors to follow in order to prevent conflict of interest. Exchange of Thailand. The best practice is as follows: 3) Lending or investing in business in which Director 1) Each Director must disclose information on has interest must be unanimously approved by the Board of transactions that might lead to conflict of interest, Directors without attendance of such Director. To prevent Annual Report 2020 183

conflict of interest, pricing and terms and conditions must Moreover, in conducting future related-party be determined in accordance with the Bank’s normal trading transactions or connected transactions, the Bank will and with the same treatment given to general customers. adhere to the same practices as those employed in conducting transactions with general customers under 5. Policy on Conducting Future Related the trading terms and conditions that are not different from Party Transactions those observed by general business or business of Related-party transactions or connected transactions the same type. Remuneration paid or received from such may occur in general business operation if the Bank sees transactions shall comply with market price or fair price. that such transactions will bring utmost benefit to the Bank. Complete and accurate disclosure of relevant information The transactions must be conducted in compliance with concerning related-party transactions or connected the regulators’ requirements and the Bank’s measure transactions is required to be incompliance with in which clear approval procedures are stipulated. the regulators. 184

Corporate Social Responsibility (CSR)

Krungthai Bank adheres to business operations complying and as stipulated in this regulation. The said regulation unified with corporate social responsibility in order to steer the the process of prevention of bribery of government employees organization and all groups of stakeholders toward sustainable and officials. The essentials are summarized as follows: development as per the Bank’s mission. In this regard, the Bank (1) In the risk assessment process, risk of bribery of has stipulated good corporate governance policy, code of government employees and officials must be identified and conduct and anti-corruption policy to push forward the Bank’s assessed by collecting data and analyzing risks of bribery of operation under the zero-tolerance approach. The Bank also government employees and officials. When getting the result of activated the Creating Shared Value (CSV) strategy in order to risk that may arise, for significant risks, the Bank will establish improve the environment, society and economic system. preventive measures and mitigate potential risks to the Bank. Furthermore, the Bank has exploring expectations of stakeholders, Incidentally, it is required to provide regular risk assessment who play important role in business operations, in an attempt to at least once a year to correspond with the changing environment acknowledge and respond to their needs sustainably. and business of the Bank. (2) Audit and assessment process of internal control 1. Additional guideline on prevention of measures of the Bank: Audit and assessment of internal control involvement in corruption measures to prevent bribery of government employees and The Board of Directors has placed the importance on anti- officials may consider the results of audit inside and outside the corruption, bribery and corruption by adhering to the business Bank, including rules and regulations of external regulator together operations with honesty and integrity and encouraging all with business model of the Bank by regularly audit and assess employees to perform duties with transparency and no corruption. appropriateness, sufficiency, efficiency and effectiveness at least In 2020, the Board of Directors approved to revise the “Anti- once a year to consider and improve measures of prevention Bribery and Corruption Policy” and resolved to adopt such policy of bribery of government employees and officials to be more specified in 2019 so as to cover all forms of anti-corruption and effective. be in accordance with the Organic Act on Counter Corruption However, after auditing and assessing measures of bribery B.E. 2561 (2018), the relevant Notification of the National Anti- prevention, the results must be reported to the Audit Committee. Corruption Commission (NACC), Notification of Anti-Corruption (3) In the review process of the internal control measures of Cooperation Committee on Minimum standards of the policy the Bank, the internal control measures to prevent bribery of and directions for anti-corruption in relation to procurement government employees and officials shall be reviewed to required to be put in place by the business operator in line with correspond with the changing situation and laws. Section 19 of the Public Procurement and Supplies Administration. (4) Communication and training is provided to spread Act, B.E. 2560 (2017). This aimed to ensure that all employees knowledge and understanding about the compliance with related practiced on the basis of anti-corruption and encouraged laws and regulations to personnel of the Bank and its subsidiaries. employees to be aware of bribery and corruption prevention The communication is sent through Email “CLMG POST” in the which will lead to the creation of good culture within the Bank. Anti-Bribery and Corruption column where articles about anti- Furthermore, the Bank announced the compliance with the bribery and anti-corruption are regularly provided. Moreover, regulation regarding the prevention of bribery of government the training course “Prevention of Bribery or Other Benefits employees and officials in order to set a guideline for establishing Considered to Be Corruption” is provided to all employees in internal control measures to prevent bribery of government Head Offices and in all regional offices, including employees of employees and officials and be in line with the Organic Act on the Bank’s subsidiaries to promote knowledge and understanding Counter Corruption B.E. 2561 (2018), Section 176. In this regard, and raise awareness about the said issue throughout the year. it shall be constituted as a guideline for the Bank’s employees The Committees, executives and employees jointly declared to practice accurately and in corresponding to related laws, an “Honest Intention on the Ethical Administration to Become which turned out to be an important preventive measure. a Zero Tolerance Organization” and “Intention to Exhibit Desirable Regarding to such regulation, the operational guideline of the Behavior according to Moral Identity of the Bank throughout Bank was established to comply with the guideline on establishing the Organization” as well as carried out the Krungthai Moral Initiative. appropriate internal control measures to prevent bribery of All of them also participated in activities and exchanged the government employees and officials prescribed by the Office of operational guidelines between cooperative network of anti- the National Anti-Corruption Commission. The crucial principle corruption with both public and private sectors organizations. of the guidelines stated that giving any property or other benefits Meanwhile, the Bank has correspondingly developed and to government employees and officials must not be done, except improved the working process in order to comply with international such giving is done under the Organic Act on Counter Corruption anti-corruption standards. In this regard, the Bank was certified Annual Report 2020 185

as a member of Thailand’s Private Sector Collective Action Krungthai Long-Love SME Loans and Krungthai single-account Coalition Against Corruption (CAC) from Thailand’s Private Sector SMEs loans. In the meantime, the Bank provided support to eco- Collective Action Coalition Against Corruption. Besides, the Bank friendly businesses by offering green loans such as an environmental has published the said policy to its stakeholders and related loan and a revolving fund project for energy conservation by persons on the Bank’s website >> menu “Corporate Governance” financial institutions. >> “Good Corporate Governance Policy” >> “Anti-Bribery and In addition, the Bank has worked with partners who have Corruption Policy”. expertise in various fields to improve the quality of life of the communities in terms of tourism management by the community, 2. Corporate Social Responsibility Activities local products, arts and culture, marketing and financial literacy. In 2020, the Bank has driven corporate social responsibility Villagers in the communities were trained and educated by the (CSR) through implementing the Creating Shared Value (CSV) Bank’s internal experts and the specialists from external strategy with the intention to improve economy, society and organization. In 2020, all 7 communities have been developed environment. By empowering the community strength via across Thailand, namely Ban Suan Durian Community in Songkhla Krungthai Loves Communities project, the Bank has emphasized Province; Ban Laem Sub-district Community in Suphanburi on the importance of developing a strong community based on Province; Ban Sanuan Nok Community in Buriram Province; Ban the principle of self-reliance to reduce the need in attaining Mae Kampong Community in Chiang Mai Province; Ban Khok Khai support from other sources. To be precise, the community must Community in Phang Nga Province; Ban Duea Community in take into account its local potential, resources, wisdom, way of life, Nong Khai Province and Tha Ma-O Community in Lampang culture and environment initially then carrying out activities Province. The Bank has also cooperated with the Biodiversity in corresponding with the National Economic and Social Finance Initiative (BIOFIN) under the United Nations Development Development Plan to build a strong community. Additionally, the Program in Thailand or UNDP and Raks Thai Foundation to launch community was encouraged to apply the philosophy of sufficiency the Koh Tao, Better Together, a crowdfunding campaign. Donation economy to create balance and generate inner strength of can be made via E-Donation QR code of the account the community. In this regard, local villagers would participate “RAKSTHAIFOUNDATION, UNDP Krungthai Love Koh Tao” to help together to brainstorm ideas as well as define guidelines and the local islanders affected by COVID-19 such as the boat drivers activities for the development of the community. to collect marine debris and clean the beaches on Koh Tao. The Bank’s strengths, related to financial knowledge, products Accordingly, this campaign also aimed to cultivating awareness and services, were exploited to fulfill various needs of communities. for environmental conservation sustainably. The operational For example, the Bank supported SME entrepreneurs by offering goals of aforementioned projects and campaigns are as follows:

Krungthai Loves Communities project throughout Thailand

Execution Plan Strategy Execution Plan

Accounting (income-expenses) E-Commerce Financial planning Visibility (savings, debt, taxes, investments) Social Media / Website Financial innovations Publication of community Financial Marketing (Krungthai Next, Krungthai Connext) literacy introduction

Engagement Preservation of local Resource allocation Arts and traditions and cultures Environmental conservation Administration Culture Community

Products and services Elevating the standard developmentร of tourism Tourism and travel-related Products Packaging development Training in basic English skills services Logo design Organizing tourism Location of sale/ promotion activities product display

Goal Happieness index Award & Recognition Number of products and services launched by the communities 186

The Bank closely supervised the subsidiaries’ businesses and ensure that employees are willing to work and contribute to would coordinate with subsidiaries in the event that there the Bank’s growth. may be any actions or related issues that may affect the society In 2020, the Bank initiated a process of defining key and environment in order to investigate and allow that subsidiary sustainability issues that lead to the formulation of the Bank’s to resolve a problem. Additionally, the report on the progress of 2021 sustainability development policy and strategy through the resolution must be submitted to the Bank correspondingly. a survey of stakeholders in terms of the impact on various factors However, in the past year, there were no incidents affecting affecting the sustainability of the Bank in different dimensions, the corporate social responsibility of the Bank’s subsidiaries. i.e., performance sustainability, operational sustainability and social and environmental sustainability. 3. Survey of stakeholder expectations The stakeholders surveyed by the Bank consist of the regarding the business operations Management, shareholders, regulators, supervision agency for The Bank has the precise process to acknowledge and the financial institution, employees, the Bank’s subsidiaries, respond to stakeholders’ needs. Opportunities are provided for business partners, customers and competitors. The data obtained relevant stakeholders to participate by any means in an attempt from the survey were analyzed and used in conducting to offer products and services that satisfy customers, oversee a materiality matrix in order to define material issues of the Bank’s business operation in accordance with laws and regulations and sustainability and goals (as shown in the diagram).

Process of stakeholder expectation survey: To define materiality and formulate sustainability development policy and strategy of the Bank

1 2 3 Survey Design Survey Impact (Stakeholder Identification, Questionnaire design) Analysis

6 5 4 Setting Sustainability Material Issue Material Matrix Strategic Objectives Identification and Ranking /Goals

Survey results can be classified into 3 dimensions of sustainability as follows:

Impacts Dimensions Economic Sustainability Internal Bank Operational Sustainability Environmental & Social Sustainability External Economy, Environment,Society Annual Report 2020 187

The materiality order of sustainability issues of the Bank in accordance with stakeholders’ opinions

Materiality Matrix

21% Sustainable growth & profit

18%

15%

Financial risk 12% management Innovation 9%

Impacts to Krungthai Bank Customer relation Good governance management Digitization of operation 6% HR management Reputation/ branding /development Transparency and fairness Operational risk management Compliance Business Ethics/ customer trust 3% Climate risk management Responsible services Research-driven strategy Not financing non-ESG External Envi & Soc. activities Stakeholder engagement Financing ESG 0% Support SDGs Eco-efficiency operation 0% 2% 4% 6% 8% 10% Impacts to Economy, Environment and Society

We create a materiality matrix based on the stakeholders’ Besides, the Bank has attached importance to transparency opinions from which the sustainability issues are classified into and accountability by disclosing information on the sustainability 3 levels: performance of the organization in the Sustainability Development - The issues which are significantly important to the bank’s Report in accordance with the GRI Standards (Global Reporting sustainability are sustainable growth and profit, financial risk Initiative). The GRI Standards are the latest standards and in line management and good governance, respectively. with the Form 56-1 of the Office of the Securities and Exchange - The issues which are moderately important to the bank’s Commission (SEC), which disclose the Bank’s sustainability sustainability are innovation, digitization of operation, customer performance in terms of economy, society and environment, relation management, business ethics/customer trust, compliance, including the implementation of corporate governance on reputation/branding, transparency and fairness, financing ESG, materiality of the Bank and its stakeholders both inside and responsible services, climate risk management and eco-efficient outside the organization. operation, respectively. All operations of the Bank are able to build confidence - The issues which are fairly important to the bank’s among all groups of stakeholders, which will be the essential sustainability are HR management development, not financing foundation for organization development towards sustainability non-ESG, operational risk management, and stakeholder in all dimensions. Details of the Bank’s corporate social engagement, respectively. responsibility can be found on the Bank’s website: menu In order to respond to stakeholders’ needs and opinions and “Sustainability” >> topic “Sustainability Report” >> “Sustainability promote stakeholder engagement in the Bank’s operations, these Report 2020”. sustainability issues were taken into consideration when formulating the Bank’s strategies for 2021. 188

Report of the Audit Committee 2020 The Audit Committee of Krungthai Bank PCL consists of three (3) qualified Independent Directors namely:- 1. Mr. Vichai Assarasakorn Chairman of the Audit Committee 2. General Tienchai Rubporn Member of the Audit Committee 3. Mrs. Nitima Thepvanangkul Member of the Audit Committee Mr. Panabhand Hankijjakul - First Executive Vice President - Head of Internal Audit Group, has been the secretary for the Audit Committee since 2 March 2020 to replace Mr. Santi Parivisutt. The Audit Committee performed duties in accordance with the scope of work and responsibilities defined in the Audit Committee Charter as assigned by the Board of Directors, which comply with the Best Practice of the Securities and Exchange Commission and the regulations of the Ministry of Finance. The Committee put emphasis on stipulating systematic working procedures in terms of good corporate governance, risk management system and the adequate internal control. Additionally, the Committee also placed the importance on efficient and effective internal audit process, encouraged for value-added creation and prevented any damages that may occur to the Bank, as well as endeavored to become the Trusted Advisor. The details are clarified as follows: • Emphasized on the risk culture cultivation to drive the Bank’s operations in line with the principles of good governance and to have strong internal controls that accommodated for changes in business operation by continually implementation of Krungthai Moral Initiative (One Unit, One Sustainable Plan), Krungthai Moral Initiative encouraged the First Line of Defense of each unit has been taking part in and has adopted the Inside-out Blasting approach of H.M. King Bhumibol Adulyadej the Great (King Rama IX) concurrently with the purpose of driving the Three Lines of Defense process to run efficiently. In 2020, the aforementioned initiative and approach have been integrated to improve corrective action process of critical credit findings as well as adjusting the employees’ mindset to perform their work with morals and ethics. As a result, the Krungthai Moral Initiative, as an important basis, shall enable the Bank to achieve its goal of being “Sustainable Krungthai.” • Supported the Internal Audit Group to implement the strategy of Internal Audit Group - AAA: Assurance, Advising and Anticipation. To elaborate, the internal audit unit shall extend duty from assurance role (Assurance) to the development of work quality and creating value-added suggestions based on findings (Advising) and anticipating risks (Anticipation) that may happen in order to protect and close the risks. Moreover, the aforementioned strategy has been communicated to the companies in the consolidated group through the Annual Audit Committee Conference KTB Group to elevate their internal audit to be equipped with readiness in work process (Process), multitasking skill people (People) and effective tools (Tool) with technology to help enhance the operations. • Due to the COVID-19 pandemic, the Audit Committee suggested the Internal Audit Group to adjust the audit process to be corresponding to the current situation. In particular, the Internal Audit Group should implement technology as the tool to continuously analysis, monitor and oversee the irregularities as well as accelerate the execution of the Robotic Process Automation (RPA) system to increase the efficiency of the audit work. During the year 2020, the Audit Committee held 22 meetings in total with the objectives to consider related issues with the Management, Senior Executives and external auditors. The Audit Committee reported the operation results to the Board of Directors on a monthly basis. The meeting attendance of the Audit Committee is as follows: Audit Committee Meeting Attendance Mr. Vichai Assarasakorn 22 General Tienchai Rubporn 22 Mrs. Nitima Thepvanangkul 22 The Audit Committee performances are summarized as follows: Review the Financial Report The Audit Committee with the support from the external auditor and executives of the Financial Management Group monthly reviewed the operation performances and quarterly, half-yearly and annually reviewed financial statement of the Bank and the consolidated financial statement of the Bank and consolidated group. The Committee has regularly discussed with the external auditors for the accuracy of the financial statements, the adjustment of significant accounting entries, the accounting estimates, the appropriateness of accounting policies, the observations from the audits and the reviews of the financial statements of the auditors, which have impacts to the financial statements. This was to ensure that the process of conducting the financial statement and the financial reports complied with the specified laws and general accepted accounting principles, while the disclosures of information were adequate, complete, timely, reliable and practical to the users of financial statement. However, the Committee shall track the consequence that may arise due to the announcement of new International Financial Reporting Standard - IFRS 9. In the meantime, the Audit Committee and the auditors also held the extraordinary meetings without the participation of the Management to discuss regarding the scopes, guidelines and audit plans. Review the Related-Party Transactions and Conflicts of Interest The Audit Committee reviewed related-party transactions between the Bank and its subsidiaries, the interconnected transactions or the transactions that may involve a conflict of interest to ensure that such transactions were reasonable, followed the normal business conditions and provided the utmost benefit to the Bank. The Committee oversaw that the information was adequately disclosed with transparency and without transactions that caused negative impact on the Bank significantly. Annual Report 2020 189

Review the the Risk Management Sustain the Quality of the Audit Committee The Audit Committee reviewed the risk management of The Audit Committee Charter was reviewed and revised. the Bank and financial business group. Furthermore, the Committee The performance evaluation of the Audit Committee was followed up the operation results of risk management through conducted on individual Director and board-as-a-whole the summary report from the Risk Oversight Committee on quarterly (self-assessment and cross evaluation) in accordance with basis to ensure that the risk management of the Bank in each the Best Practice of the State Enterprise Policy Office, Ministry of field was appropriate, effective and the risk was at the acceptable Finance and the Good Practice of the Securities and Exchange level. In addition, the Committee monitored both internal and Commission to ensure that the operations of the Audit Committee were efficient and achieved the objectives as defined in external challenging situations that affected the Bank, especially the Audit Committee Charter. Nevertheless, the skill and knowledge the matters related to credit risk, the adequacy of provisions, development plan for the Audit Committee has been established including the credit approval process of the Bank. based on the required skills and knowledge (Skill Matrix) to Review the Effectiveness of Internal Control System enhance the Committee’s performance. According to the regulations by the Office of the Auditor External Auditor General of Thailand, the report of internal control assessment The Audit Committee considered the appointment of the was reviewed. The Committee monitored the establishment of external auditor on an annual basis. After the Board of Directors’ internal control system and the self-assessment of the internal approval, the Audit Committee proposed the appointment of controls to ensure that the Bank’s internal control system was the external auditor in the Annual Ordinary General Meeting of adequate and appropriate. Shareholders. In 2020, the Board of Directors had a resolution to Review the Compliance Operations appoint the EY Office Limited to be the Bank’s external auditor. The Audit Committee regularly reviewed the compliance The proposed auditors have been considered by their with laws and regulations relevant to the Bank’s business qualification, knowledge, expertise, audit experience in banking operations. Regarding to this, the Committee considered the business, audit programs as well as auditor independence as result of overseeing the compliance with laws and regulations in accordance with the regulation of by the Bank of Thailand and from the minutes of the Compliance Committee’s meeting, the Securities and Exchange Commission. In this regard, the the inspection results of the regulatory agencies and the external auditors must receive the approval from the State Audit Office auditors in order to ensure that the Bank has complied with of the Kingdom of Thailand. Meanwhile, the Bank also took into related laws, requirements of the regulators and the Bank’s consideration the appropriateness of the audit fee accordingly. regulations. The Audit Committee reviewed the accuracy of The Audit Committee performed its duty as assigned by the information, which was filing as part of a request form submitted Board of Directors and complied with the responsibilities specified to Thailand’s Private Sector Collective Action Coalition against in the Audit Committee Charter with prudence and independence. Corruption for the renewal of the member certificate. All the opinions expressed were straightforward, transparent, Monitor the Operations of Internal Audit verifiable and in line with good corporate governance. In addition, The Audit Committee approved the review of the Internal the Committee provided honest opinions and suggestions for Audit Group Charter in order to consider the appropriateness of the utmost benefit of the Bank, regardless of limitation in obtaining the duty, responsibility, scope of work, including the rights and information, resources and cooperation from the Bank. The Audit independence in performing duty. The Committee approved Committee is of the opinion that the Bank’s financial statements the Bank’s audit program together with the Internal Audit Group’s and information disclosure are complete, reliable and consistent strategic plan, 5-year audit plan, annual audit plan and working with generally accepted accounting principles while the auditor manual of the Internal Audit Group. Furthermore, the Committee is independent and performs duty due to professional expertise. considered approving the annual budget of Internal Audit Group, Overall risk management and internal control system have been the recruitment plan, the human resource development plan, implemented effectively and adequately. Internal audits have the career path plan, the retention plan, the adequacy assessment been independently conducted covering high-risk operations of resources, KPIs index, the annual performance appraisal of and complying with the internal audit standards. Besides, the Internal Audit Group Head, the audit result of Internal Audit Group appropriate system of control in place has been ensured to follow as well as monitoring the revised of crucial points and the the applicable laws and regulations corresponding with the performance progress in conforming with the approved audit current business environment. plans. For further efficient operations, the Committee also provided recommendations and supervised the handling of complaints or whistleblowing appropriately and fairly to all related parties. Moreover, the Committee also approved the annual credit review plan for credit transactions of the financial institutions conducted by the Credit Review Department before presenting to the Bank’s Board of Directors for approval. Accordingly, the Committee shall follow up the implementation of the plans and the review results (Mr. Vichai Assarasakorn) of the Credit Review Department respectively. Chairman of the Audit Committee 190

The Board of Directors’ Responsibility for Financial Reports The Board of Directors has attached great importance and has been well aware of its duty as Directors to take responsibility for the Krung Thai Bank’s financial statements and the consolidated financial statements of Krung Thai Bank and its subsidiaries as well as the financial information in the annual report, by overseeing to ensure that the financial statements were prepared in accordance with financial reporting standards and generally accepted accounting principles by appropriate and consistence practicing base on the prudence, accuracy, completeness, truthfulness, and rationality should be adhered to at all times so that the statements accurately reflect the Bank’s operating performance. In this connection, the Bank has reported its operating performance regularly as per schedule and transparently disclosed adequate substantial information to the regulators and the Stock Exchange of Thailand (SET) in the interest of the shareholders and general investors.The financial statements have been audited and have given unqualified opinions by independent certified public accountants. The Bank’s management, under the supervision of the Board of Directors, adhered to good corporate governance and maintained appropriate and effective risk management, internal control system and internal audit to ensure accurate, complete and adequate financial information for retention of assets including prevention and verification of frauds or any significant irregularities. The Board of Directors has appointed the Audit Committee comprising of Independent Directors to oversee and review the reliability and accuracy of the financial reports together with the appropriateness and adequacy of internal control as well as the efficiency and effectiveness of internal audit to ensure the accuracy and reliability of the Bank’s financial statements. The Audit Committee has expressed its opinions in the Report of the Audit Committee in this annual report. The Board of Directors’ opinion is that the overall internal control is sufficient and appropriate. It contributes to enhance reasonable confidence that the Bank’s financial statements and the consolidated financial statements of the Bank and its subsidiaries for the year ended December 31, 2020, which reflect the financial statement and performance of the Bank and its subsidiaries at the said date, are reliable pursuant generally accepted accounting standards and comply with relevant laws and regulations.

(Mr. Krisada Chinavicharana) (Mr. Payong Srivanich) Chairman of the Board of Directors President Annual Report 2020 191

Independent Auditor’s Report

To the Shareholders of Krung Thai Bank Public Company Limited

Opinion

I have audited the accompanying consolidated financial statements of Krung Thai Bank Public Company Limited and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at 31 December 2020, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies, and have also audited the separate financial statements of Krung Thai Bank Public Company Limited for the same period. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Krung Thai Bank Public Company Limited and its subsidiaries and of Krung Thai Bank Public Company Limited as at 31 December 2020, their financial performance and cash flows for the year then ended in accordance with Thai Financial Reporting Standards and the Bank of Thailand’s regulations.

Basis for Opinion

I conducted my audit in accordance with Thai Standards on Auditing. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Group in accordance with the Code of Ethics for Professional Accountants as issued by the Federation of Accounting Professions as relevant to my audit of the financial statements, and I have fulfilled my other ethical responsibilities in accordance with the Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Emphasis of matter

I draw attention to Note 3 to the consolidated financial statements, the Bank and its subsidiaries have adopted new accounting policies in respect of the set of Thai Financial Reporting Standards related to financial instruments and Accounting Guidance on Temporary Relief Measures for Entities Providing Assistance to Debtors Impacted by Situations that Affect the Thai Economy, announced by the Federation of Accounting Professions in preparation of the current year’s financial statements. My opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in my professional judgement, were of most significance in my audit of the financial statements of the current year. These matters were addressed in the context of my audit of the financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters. I have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report, including in relation to these matters. Accordingly, my audit included the performance of procedures designed to respond to my assessment of the risks of material misstatement of the financial statements. The results of my audit procedures, including the procedures performed to address the matters below, provide the basis for my audit opinion on the accompanying financial statements as a whole. Key audit matters and how audit procedures respond to each matter are described below. 192

Allowances for expected credit losses of loans to customers

The Bank and its subsidiaries (the Group) have adopted Thai Financial Reporting Standards No. 9 Financial Instruments, which became effective on 1 January 2020. This financial reporting standard stipulates the basis to be used for calculation of impairment on financial instruments using the expected credit losses method. The basis involves complex calculation modelling and requires management to use significant judgements and estimates in developing expected credit losses models in compliance with Thai Financial Reporting Standards and the rules set by the Bank of Thailand. The areas of significant management judgement include the identification of criteria for assessment of a significant increase in credit risk of loans to customers, the relevant variables with modelling, the selection of the future economic variables to be incorporated in the models and a management overlay used to adjust of the allowance for expected credit losses due to the limitations of the model. As discussed in Note 9.8 to the consolidated financial statements, as at 31 December 2020, the Group had loans to customers of Baht 2,334,842 million (representing 70 percent of total assets) and allowances for expected credit losses amounting to Baht 150,528 million, which are material amounts to the financial statements. Because of the materiality and the use of judgement and estimates mentioned above, I addressed the adequacy of allowances for expected credit losses of loans to customers as a key audit matter. I gained an understanding of, assessed and tested, on a sampling basis, the effectiveness of the Group’s internal controls relating to the loan origination, the calculation of allowance for expected credit losses of loans to customers, taking into account the exposure balances, complexity and credit risk of each loan portfolio. I compared the accounting policies of the Group with Thai Financial Reporting Standards and the regulations announced by the regulator. I considered and assessed the process governing model development, reviewed model development documentation and model validation report as prepared by the specialist engaged by the management of the Group and independent department of the Group, and tested, on a sampling basis, the accuracy of the data used in model development. I also assessed the methods and assumptions applied by the Group in the calculation of the allowance for expected credit losses, including the method used to incorporate the management overlay to address the limitations of the model and the recording of allowance for expected credit losses. I tested, on a sampling basis, the controls over the information technology systems relevant to the calculation of allowance for expected credit losses. I examined the allowances for expected credit losses by assessing, on a sampling basis, the classification of loans to customers based on the changes in credit risk since initial recognition, and recalculating, on a sampling basis, the allowance for expected credit losses as at the end of the accounting period, including testing, on a sampling basis, the completeness of the data used in the calculation of allowance for expected credit losses.

Moreover, I assessed the adequacy of disclosure in accordance with the relevant financial reporting standards, as well as notifications and guidelines announced by the Bank of Thailand. Annual Report 2020 193

Recognition of interest income on loans to customers

For the year ended 31 December 2020, the Group recognised interest income on loans to customers amounting to Baht 104,307 million (representing 85 percent of total income). The Group recognised interest income using the effective interest rate method, which involves the use of management judgement and estimates in estimating future cash flow receipts throughout the expected life of the financial instrument or, when appropriate, a shorter period, taking into account any discount or premium on acquisition, fees and costs that are an integral part of the effective interest rate. Moreover, the interest income was generated from various type of loans provided to a large number of customers and each type of loan agreement had different terms and conditions. In addition, the recognition of interest income relies primarily on data processed by the information technology systems. I therefore focused my audit on whether interest income on loans to customers is recognised appropriately and in a timely manner, in accordance with Thai Financial Reporting Standards and the regulations announced by the Bank of Thailand. The audit procedures I performed were to gain an understanding of, assess and test, on a sampling basis, the effectiveness of the Group’s internal controls relating to loan origination and interest income recognition, including relevant internal controls over information systems. I compared the accounting policies of the Group with Thai Financial Reporting Standards and the regulations announced by the regulatory agency. I also assessed the methods applied by the management to determine the future cash flow receipts and the expected life of the financial instruments used in calculating the effective interest rate, including testing, on a sampling basis, the accuracy of the data and the calculation. In addition, I applied a sampling method to select loan agreements to consider whether the recognition was consistent with the conditions of the relevant agreement and an adjustment was made to reflect effective interest rate. I also performed analytical procedures on interest income on loans to customers and examined, on a sampling basis, material adjustments made through journal vouchers.

Other Matter

The consolidated financial statements of Krung Thai Bank Public Company Limited and its subsidiaries, and the separate financial statements of Krung Thai Bank Public Company Limited for the year ended 31 December 2019 were audited by another auditor who, under his report dated 26 February 2020, expressed an unmodified opinion on those financial statements.

Other Information

Management is responsible for the other information. The other information comprise the information included in annual report of the Bank, but does not include the financial statements and my auditor’s report thereon. The annual report of the Bank is expected to be made available to me after the date of this auditor’s report.

My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon. In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit or otherwise appears to be materially misstated. When I read the annual report of the Bank, if I conclude that there is a material misstatement therein, I am required to communicate the matter to those charged with governance for correction of the misstatement. 194

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with Thai Financial Reporting Standards and the Bank of Thailand’s regulations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Thai Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Thai Standards on Auditing, I exercise professional judgement and maintain professional skepticism throughout the audit. I also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. Annual Report 2020 195

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. I am responsible for the direction, supervision and performance of the group audit. I remain solely responsible for my audit opinion. I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. I also provide those charged with governance with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, I determine those matters that were of most significance in the audit of the financial statements of the current year and are therefore the key audit matters. I describe these matters in my auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. I am responsible for the audit resulting in this independent auditor’s report.

Ratana Jala Certified Public Accountant (Thailand) No. 3734 EY Office Limited Bangkok: 24 February 2021 196

KRUNG THAI BANK PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENT OF FINANCIAL POSITION As at 31 December 2020 (Unit: Thousand Baht)

Consolidated financial Separate financial statements statements

Note 31 December 2020 31 December 2019 31 December 2020 31 December 2019 Assets Cash 9.1 68,161,357 68,433,721 68,115,583 68,361,786 Interbank and money market items - net 9.3 516,791,903 338,770,589 516,320,956 338,273,821 Financial assets measured at fair value through profit or loss 9.4 13,723,789 - 14,188,472 - Claims on securities - 67,350,100 - 67,350,100 Derivatives assets 9.5 74,506,773 55,811,418 74,506,773 55,811,462 Investments - net 9.6 316,987,630 395,227,970 316,894,505 395,174,162 Investments in subsidiaries and associated companies - net 9.7 29,400,185 30,945,612 11,203,675 10,830,013 Loans to customers and accrued interest receivables - net 9.8 2,200,513,321 1,959,765,482 2,127,089,495 1,884,110,174 Customers' liability under acceptances - 133,241 - 133,241 Properties for sale - net 9.10 32,659,270 32,182,562 32,569,053 32,175,895 Premises and equipment - net 9.11 24,762,212 24,200,896 21,899,006 22,293,897 Right-of-use assets 9.12 4,474,111 - 3,571,005 - Other intangible assets - net 9.13 6,005,144 3,900,228 3,893,939 1,398,367 Deferred tax assets 9.14 5,880,565 8,164,563 3,560,552 5,697,176 Accrued income 2,598,857 3,487,317 2,070,343 3,193,301 Other assets - net 9.15 31,315,152 23,842,421 31,103,526 23,554,727 Total assets 3,327,780,269 3,012,216,120 3,226,986,883 2,908,358,122 The accompanying notes are an integral part of the financial statements.

(Krisada Chinavicharana) (Payong Srivanich) Chairman President Annual Report 2020 197

KRUNG THAI BANK PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENT OF FINANCIAL POSITION (CONTINUED) As at 31 December 2020 (Unit: Thousand Baht)

Consolidated financial Separate financial statements statements

Note 31 December 2020 31 December 2019 31 December 2020 31 December 2019 Liabilities and equity Deposits 9.16 2,463,225,282 2,155,864,986 2,466,780,410 2,158,459,942 Interbank and money market items 9.17 274,566,462 215,822,527 268,424,903 208,239,974 Liabilities payable on demand 4,731,953 4,744,254 4,731,953 4,744,254 Liabilities to deliver securities - 67,350,100 - 67,350,100 Derivatives liabilities 9.5 65,471,404 51,868,539 65,471,404 51,868,539 Debt issued and borrowings 9.18 86,564,198 96,841,300 44,292,498 51,322,900 Banks' liability under acceptances - 133,241 - 133,241 Lease liabilities 9.12 4,503,684 - 3,528,830 - Provisions 9.19 20,286,873 15,239,758 18,740,381 13,776,104 Other liabilities 9.20 53,366,819 56,025,029 46,041,249 48,239,602 Total liabilities 2,972,716,675 2,663,889,734 2,918,011,628 2,604,134,656 Equity Share capital 9.21 Authorised share capital 5,500,000 perferred shares of Baht 5.15 each 28,325 28,325 28,325 28,325 13,976,061,250 ordinary shares of Baht 5.15 each 71,976,715 71,976,715 71,976,715 71,976,715 Issued and paid-up share capital 5,500,000 perferred shares of Baht 5.15 each 28,325 28,325 28,325 28,325 13,976,061,250 ordinary shares of Baht 5.15 each 71,976,715 71,976,715 71,976,715 71,976,715 Premium on share capital Premium on ordinary share 20,833,734 20,833,734 20,833,734 20,833,734 Deficit from the change in the ownership interests in subsidiary (165,255) - - - Other components of equity 9.22 32,179,036 33,006,142 17,789,287 16,094,673 Retained earnings Appropriated Legal reserve 9.23 7,200,504 7,200,504 7,200,504 7,200,504 Unappropriated 211,412,693 205,241,876 191,146,690 188,089,515 Equity attributable to equity holders of the Bank 343,465,752 338,287,296 308,975,255 304,223,466 Non-controlling interests 11,597,842 10,039,090 - - Total equity 355,063,594 348,326,386 308,975,255 304,223,466 Total liabilities and equity 3,327,780,269 3,012,216,120 3,226,986,883 2,908,358,122 The accompanying notes are an integral part of the financial statements.

(Krisada Chinavicharana) (Payong Srivanich) Chairman President 198

KRUNG THAI BANK PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2020 (Unit: Thousand Baht except basic earnings per share expressed in Baht)

Consolidated financial Separate financial statements statements

Note 2020 2019 2020 2019 Profit or loss Interest income 9.30 112,836,857 122,971,682 97,894,144 108,319,525 Interest expenses 9.31 24,494,134 34,655,374 22,995,811 33,160,897 Net interest income 88,342,723 88,316,308 74,898,333 75,158,628 Fees and service income 27,690,138 29,596,109 21,557,134 23,274,977 Fees and service expenses 7,162,213 6,358,577 5,183,896 4,706,151 Net fees and service income 9.32 20,527,925 23,237,532 16,373,238 18,568,826 Gains on financial instruments measured at fair value through profit or loss 9.33 3,134,376 - 3,197,183 - Gains on trading and foreign exchange transactions 9.34 - 3,196,695 - 3,196,195 Gains on investments 9.35 950,926 4,371,598 941,257 4,375,388 Share of profit from investments accounted for under equity method 2,060,328 1,424,575 - - Dividend income 375,896 495,561 2,348,887 2,474,526 Other operating income 6,855,249 4,615,370 3,705,785 1,111,411 Total operating income 122,247,423 125,657,639 101,464,683 104,884,974 Other operating expenses Employee's expenses 28,466,296 31,389,836 22,993,299 25,484,299 Directors' remuneration 298,069 108,558 68,198 64,785 Premises and equipment expenses 8,895,416 8,941,746 5,306,832 5,326,923 Taxes and duties 3,797,471 4,363,018 3,297,985 3,801,607 Impairment losses of properties for sale 1,538,442 7,219,052 1,541,377 7,260,850 Other expenses 10,469,150 10,451,485 13,753,189 13,538,254 Total other operating expenses 53,464,844 62,473,695 46,960,880 55,476,718 Expected credit losses 9.36 44,902,881 - 38,427,695 - Impairment losses of loans and debt securities 9.37 - 23,813,535 - 17,504,328 Profit before income tax 23,879,698 39,370,409 16,076,108 31,903,928 Income tax 9.14 4,440,733 7,232,606 2,784,097 5,578,231 Profit for the year 19,438,965 32,137,803 13,292,011 26,325,697 Other comprehensive income (loss) Transactions that will be reclassified subsequently to profit or loss Gains (losses) on debt securities measured at fair value through other comprehensive income 894,894 - 905,210 - Gains (losses) on changes in value of available-for-sale investments - 1,585,753 - 1,605,929 The accompanying notes are an integral part of the financial statements.

(Krisada Chinavicharana) (Payong Srivanich) Chairman President Annual Report 2020 199

KRUNG THAI BANK PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENT OF COMPREHENSIVE INCOME (CONTINUED) For the year ended 31 December 2020 (Unit: Thousand Baht except basic earnings per share expressed in Baht) Consolidated financial Separate financial statements statements

Note 2020 2019 2020 2019 Other comprehensive income (loss) (continued) Gains (losses) arising from translating the financial statements of foreign operations 43,703 (15,867) 43,703 (15,867) Gains (losses) on cash flow hedges 9.5 169,661 - 169,661 - Gains (losses) from deferred cost of hedging 9.5 90,153 - 90,153 - Share of other comprehensive income of associate (equity method) for items that will be reclassified subsequently to profit or loss 9.7.2 (1,555,420) 12,823,440 - - Income tax relating to other comprehensive income (loss) for items that will be reclassified subsequently to profit or loss (239,549) (317,151) (241,612) (321,186) Transactions that will never be reclassified subsequently to profit or loss Change in surplus on revaluation of assets - (180,526) - (180,526) Share of other comprehensive income of associate (equity method) for items that will never be reclassified subsequently to profit or loss 9.7.2 (1,204,144) - - - Gains (losses) on investments in equity designated to be measured at fair value through other comprehensive income (1,994,260) - (1,820,302) - Actuarial gains (losses) on defined benefit plan (806,171) (989,619) (763,033) (865,316) Income tax relating to other comprehensive income (losses) for items that will never be reclassified subsequently to profit or loss 525,144 234,029 516,517 209,168 Other comprehensive income (loss) - net (4,075,989) 13,140,059 (1,099,703) 432,202 Total comprehensive income (loss) 15,362,976 45,277,862 12,192,308 26,757,899 Total profit attributable to: Equity holders of the Bank 16,731,585 29,284,042 13,292,011 26,325,697 Non-controlling interest 2,707,380 2,853,761 19,438,965 32,137,803 Total comprehensive income attributable Equity holders of the Bank 12,641,748 42,451,458 12,192,308 26,757,899 Non-controlling interest 2,721,228 2,826,404 15,362,976 45,277,862 Earnings per share of the Bank 9.38 Basic earnings per share (Baht) 1.20 2.09 0.95 1.88 The accompanying notes are an integral part of the financial statements.

(Krisada Chinavicharana) (Payong Srivanich) Chairman President KRUNG THAI BANK PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES 200 STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2020 (Unit: Thousand Baht)

Consolidated financial statements

Attributable to equity holder of the Bank

Other components of equity

Issued and Total equity Gains (losses) Deficit from fully atiributable Surplus Surplus Gains (losses) from Share of other the change in Non- paid-up Premium (deficit) (deficit) from Hedge translating comprehensive the ownership to equity share on share on revaluation on revaluation reclassification reserve the financial income interest in Retained holders controlling capital capital of assets of investments of investments (Note 9.5) statements of associates subsidiary earnings of the Bank interests Total Balance as at 1 January 2019 72,005,040 20,833,734 8,350,437 6,265,396 644,353 - (99,869) 3,914,071 - 193,962,287 305,875,449 8,265,654 314,141,103 Dividends (Note 9.24) ------(10,039,611) (10,039,611) (1,068,730) (11,108,341) Adjustment gains (losses) from reclassification of investments - - - 646,230 (646,230) ------Non-controlling interest increases from disposal of investments in subsidiary company ------15,762 15,762 Total comprehensive income (loss) - - (144,421) 1,268,602 - - (15,867) 12,823,440 - 28,519,704 42,451,458 2,826,404 45,277,862 Balance as at 31 December 2019 72,005,040 20,833,734 8,206,016 8,180,228 (1,877) - (115,736) 16,737,511 - 212,442,380 338,287,296 10,039,090 348,326,386

Balance as at 1 January 2020 72,005,040 20,833,734 8,206,016 8,180,228 (1,877) - (115,736) 16,737,511 - 212,442,380 338,287,296 10,039,090 348,326,386 Cumulative effects of changes in accounting policies (Note 6) - - - 2,129,230 1,877 (29,786) - 129,137 - 1,019,741 3,250,199 - 3,250,199 Balance as at 1 January 2020 - as restate 72,005,040 20,833,734 8,206,016 10,309,458 - (29,786) (115,736) 16,866,648 - 213,462,121 341,537,495 10,039,090 351,576,585 Dividends (Note 9.24) ------(10,528,965) (10,528,965) (1,150,528) (11,679,493) Change in the ownership interest in subsidiaries ------(165,255) 169,746 4,491 (4,491) - Decrease in non-controlling interest ------(7,457) (7,457) Surplus on revaluation of assets - - 417,694 ------417,694 - 417,694 Transfer to retained earnings - - (44,206) ------(562,505) (606,711) - (606,711) Total comprehensive income (loss) - - - (923,042) - 207,850 43,704 (2,759,564) - 16,072,800 12,641,748 2,721,228 15,362,976 Balance as at 31 December 2020 72,005,040 20,833,734 8,579,504 9,386,416 - 178,064 (72,032) 14,107,084 (165,255) 218,613,197 343,465,752 11,597,842 355,063,594 The accompanying notes are an integral part of the financial statements.

(Krisada Chinavicharana) (Payong Srivanich) Chairman President Annual Report2020 KRUNG THAI BANK PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENT OF CHANGES IN EQUITY (CONTINUED) For the year ended 31 December 2020 (Unit: Thousand Baht)

Separate financial statements

Other components of equity

Gains (losses) Gains (losses) from Issued and Premium Surplus (deficit) Surplus (deficit) from Hedge translating the fully paid-up on share on revaluation on revaluation reclassification reserve financial Retained share capital capital of assets of investments of investments (Note 9.5) statements earnings Total

Balance as at 1 January 2019 72,005,040 20,833,734 8,350,437 6,075,297 644,353 - (99,869) 179,696,186 287,505,178 Dividends (Note 9.24) ------(10,039,611) (10,039,611) Total comprehensive income (loss) - - (144,421) 1,284,743 - - (15,867) 25,633,444 26,757,899 Adjustment gains (losses) from reclassification of investments - - - 646,230 (646,230) - - - - Balance as at 31 December 2019 72,005,040 20,833,734 8,206,016 8,006,270 (1,877) - (115,736) 195,290,019 304,223,466

Balance as at 1 January 2020 72,005,040 20,833,734 8,206,016 8,006,270 (1,877) - (115,736) 195,290,019 304,223,466 Cumulative effects of changes in accounting policies (Note 6) - - - 2,129,230 1,877 (29,786) - 860,349 2,961,670 Balance as at 1 January 2020 - as restate 72,005,040 20,833,734 8,206,016 10,135,500 - (29,786) (115,736) 196,150,368 307,185,136 Dividends payment (Note 9.24) ------(10,528,965) (10,528,965) Surplus on revaluation of assets - - 126,776 - - - - - 126,776 Transfer to retained earnings - - (44,206) - - - - 44,206 - Total comprehensive income (loss) - - - (740,831) - 207,850 43,704 12,681,585 12,192,308 Balance as at 31 December 2020 72,005,040 20,833,734 8,288,586 9,394,669 - 178,064 (72,032) 198,347,194 308,975,255 ‘The accompanying notes are an integral part of the financial statements.

(Krisada Chinavicharana) (Payong Srivanich) Chairman President 201 202

KRUNG THAI BANK PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF CASH FLOWS For the year ended 31 December 2020 (Unit: Thousand Baht)

Consolidated financial Separate financial statements statements

2020 2019 2020 2019 Cash flows from operating activities Profit before income tax 23,879,698 39,370,409 16,076,108 31,903,928 Adjustments to reconcile profit before income tax to net cash received (paid) from operating activities: Depreciation and amortisation expenses 5,026,305 2,763,549 3,358,426 1,326,159 Expected credit losses 44,902,881 - 38,427,695 - Impairment losses of loans and debt securities - 23,813,535 - 17,504,328 Share of profit from investments accounted for under equity method (2,060,328) (1,424,575) - - (Gains) losses on disposal of assets 5,830 20,378 386 (2,702) (Gains) losses on disposal of investments (950,926) (4,414,888) (950,926) (4,414,888) (Gains) losses on revaluation of investments - (362,586) - (362,586) Unrealised (gains) losses on financial instruments measured at fair value through profit and loss (1,642,048) - (1,704,855) - (Reversal) losses on impairment of properties for sale 1,538,442 7,219,052 1,541,377 7,260,850 (Reversal) losses on impairment of investment - 43,290 9,669 39,500 (Reversal) losses on impairment of other assets 423,858 156,039 423,858 156,039 Amortisation of premium (discount) on investments 405,064 (141,772) 400,015 (133,895) (Gains) losses on foreign currency translation (2,294,508) 5,381,188 (2,294,508) 5,381,193 Increase (decrease) in provisions 1,305,238 2,353,957 1,131,291 2,175,878 (Increase) decrease in other accrued income (748,321) 679,662 (513,822) 764,071 Increase (decrease) in other accrued expenses (698,785) (244,897) 145,172 (389,683) 69,092,400 75,212,341 56,049,886 61,208,192 Net interest income (88,342,723) (88,316,308) (74,898,333) (75,158,628) Dividend income (375,896) (495,561) (2,348,887) (2,474,526) Proceeds from interest income 96,554,129 123,037,526 87,803,944 108,429,940 Cash paid on interest expenses (27,674,972) (34,042,988) (26,166,611) (32,515,693) Proceeds from dividend income 658,286 748,574 2,348,436 2,474,153 Cash refunded for income tax 160,204 - - - Cash paid on income tax expenses (6,125,782) (9,264,684) (4,805,033) (7,481,420) Income from operating activities before changes in operating assets and liabilities 43,945,646 66,878,900 37,983,402 54,482,018 (Increase) decrease in operating assets Interbank and money market items (179,596,485) 33,612,438 (179,621,960) 33,359,128 Financial assets measured at fair value through profit or loss 39,244,132 - 38,842,255 - Claims on securities - (33,754,900) - (33,754,900) Derivatives assets (12,358,244) (19,581,852) (12,358,201) (19,580,429) Investments in trading securities - (25,709,953) - (25,709,953) Loans to customers (268,493,752) (91,757,936) (270,687,453) (77,472,456) Properties for sale 6,292,961 1,447,826 6,250,115 1,340,227 Other assets (8,934,734) (9,057,339) (8,873,887) (9,352,780)

The accompanying notes are an integral part of the financial statements.

(Krisada Chinavicharana) (Payong Srivanich) Chairman President Annual Report 2020 203

KRUNG THAI BANK PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF CASH FLOWS (CONTINUED) For the year ended 31 December 2020 (Unit: Thousand Baht)

Consolidated financial Separate financial statements statements

2020 2019 2020 2019 Cash flows from operating activities (continued) Increase (decrease) in operating liabilities Deposits 307,360,296 116,263,085 308,320,467 115,512,117 Interbank and money market items 58,642,059 58,426,597 60,083,053 56,240,037 Liabilities payable on demand (12,301) (835,405) (12,301) (835,405) Liabilities to deliver securities - 33,754,900 - 33,754,900 Derivatives liabilities 13,730,719 19,522,926 13,730,719 19,522,926 Other liabilities 4,410,562 4,983,357 4,611,189 5,559,807 Net cash provided by (used in) operating activities 4,230,859 154,192,644 (1,732,602) 153,065,237 Cash flows from investing activities Purchase of debt and equity securities measured at fair value through other comprehensive income (185,120,810) - (184,969,210) - Proceeds from disposal of debt and equity securities measured at fair value through other comprehensive income 211,772,115 - 211,057,548 - Purchase of debt securities measured at amortised cost (2,155,981) - (512,171) - Proceeds from disposal of debt instruments measured at amortised cost 1,487,444 - 633,970 - Purchase of available for sale securities - (291,294,598) - (291,941,198) Proceeds from disposal of available for sale securities - 147,235,586 - 147,879,162 Purchase of held to maturity debt securities - (2,197,552) - (1,181,324) Proceeds from disposal of held to maturity debt securities - 2,816,898 - 1,758,895 Purchase of general investments - (523,940) - (523,940) Proceeds from disposal of general investments - 265,376 - 265,376 Purchase of investments in subsidiaries and associates (635) (117,500) (383,331) (144,945) Proceeds from disposal of investments in subsidiaries and associates - 427,052 - 427,052 Purchase of intangible assets (2,963,389) (949,398) (2,734,296) (585,824) Purchase of premises and equipment (2,893,044) (2,925,920) (1,854,403) (2,152,332) Proceeds from disposal of premises and equipment 10,386 30,906 6,793 3,311 Purchase shares from non-contradling interest (169,746) - - - Net cash provided by (used in) investing activities 19,966,340 (147,233,090) 21,244,900 (146,195,767) Cash flows from financing activities Proceeds from debt issued and long-term borrowings 3,970,745 30,115,000 470,745 24,000,000 Repayments of debt issued and long-term borrowings (14,540,345) (26,394,750) (7,793,645) (21,113,750) Repayments of lease liabilities (2,264,173) - (1,950,339) - Dividend paid for ordinary share (10,523,974) (10,034,812) (10,523,974) (10,034,812) Dividend paid for preferred share (4,991) (4,799) (4,991) (4,799) Dividend paid to non-controlling interest (1,150,528) (1,068,730) - - Net cash provided by (used in) financing activities (24,513,266) (7,388,091) (19,802,204) (7,153,361) (Gains) losses from translating the financial statements of foreign operations 43,703 (15,867) 43,703 (15,867) Decrease in cash and cash equivalents (272,364) (444,404) (246,203) (299,758) Beginning balance of cash and cash equivalents 68,433,721 68,878,125 68,361,786 68,661,544 Ending balance of cash and cash equivalents 68,161,357 68,433,721 68,115,583 68,361,786 The accompanying notes are an integral part of the financial statements.

(Krisada Chinavicharana) (Payong Srivanich) Chairman President 204

Krung Thai Bank Public Company Limited and its subsidiaries Table of contents for notes to consolidated financial statements For the year ended 31 December 2020

Note Contents Page Note Contents Page

1. General information 205 9.19 Provisions 318 2. Basis of preparation of the financial statements 205 9.20 Other liabilities 322 3. New financial reporting standards 206 9.21 Share capital 322 4. Significant accounting policies 213 9.22 Other components of equity 323 5. Significant accounting judgements and estimates 235 9.23 Legal reserve 323 6. Cumulative effects of changes in accounting policies 9.24 Dividends 323 due to the adoption of new 9.25 Commitment and contingent liabilities 324 financial reporting standards 238 9.26 Assets with obligations and restrictions 325 7. Risk Management 246 9.27 Related party transactions 325 8. Capital funds 266 9.28 Significant financial position and operations 9. Supplementary information 268 classified by domestic and foreign 9.1 Supplementary information of cash flows 268 business segment 333 9.2 Classification of financial assets 9.29 Operations classified by operating segment 335 and financial liabilities 270 9.30 Interest Income 337 9.3 Interbank and money market items (assets) 272 9.31 Interest expenses 338 9.4 Financial assets measured at fair value 9.32 Fees and service income 338 through profit and loss 274 9.33 Gains on financial instruments measured at 9.5 Derivatives 274 fair value through profit and loss 339 9.6 Investments - net 281 9.34 Gains on trading and foreign exchange 9.7 Investments in subsidiaries and associated transactions 339 companies - net 285 9.35 Gains on investments 340 9.8 Loans to customers and accrued 9.36 Expected credit losses 340 interest receivables - net 289 9.37 Impairment losses of loans and debt securities 341 9.9 Allowance for expected credit losses/ 9.38 Earnings per share 341 Allowance for doubtful accounts 295 9.39 Provident fund 341 9.10 Properties for sale 300 9.40 Fair value of financial instruments 342 9.11 Land, premises and equipment 301 9.41 Policies on business transactions within the financial 9.12 Leases 305 business group and risk management policies 9.13 Intangible assets 307 in relation to business transactions within 9.14 Deferred tax assets/liabilities and income tax 309 the financial business group. 345 9.15 Other assets 314 9.42 Others 345 9.16 Deposits 314 9.43 COVID-19 347 9.17 Interbank and money market items (liabilities) 315 9.44 Events after the reporting period 347 9.18 Debt issued and borrowings 316 9.45 Approval of the financial statements 347 Annual Report 2020 205

Krung Thai Bank Public Company Limited (“the Bank”) is a public company limited registered in Thailand with its head office located at 35 Sukhumvit Road, Klongtoey Nua, Wattana, Bangkok. The Bank engages in commercial banking business and conducts its business through a nationwide branch network and in certain major centers of the world.

The COVID- 19 pandemic is continuing to evolve, resulting in an economic slowdown and impacting various businesses and industries, directly or indirectly. The situation may bring uncertainties and affect the Bank’ s and its subsidiaries’ business activities which may impacting the Bank’s and its subsidiaries’ operating results and cash flows, at present and in the future. The impact cannot be reasonably estimated at this stage.

These financial statements are presented in accordance with the Notification of the Bank of Thailand (“BOT”) No. SOR NOR SOR. 21/ 2561 dated 31 October 2018, regarding the Preparation and Announcement of Financial Statements of Commercial Banks and Parent Companies of Financial Holding Groups, including any other supplementary BOT’s Notifications; and with the regulations of the Stock Exchange of Thailand (“SET”) dated 2 October 2017, regarding the Preparation and Submission of Financial Statements and Report on Financial Position and Results of Business Operations of Listed Companies, B.E. 2560. Moreover, these financial statements are prepared in conformity with generally accepted accounting principles, under the Accounting Act B.E. 2547.

The consolidated financial statements

The consolidated financial statements comprise the financial statements of the Bank and those of its subsidiaries in which the Bank has a controlling interest, after eliminating significant intercompany transactions and balances. The 8 subsidiaries are KTB Law Co. , Ltd., KTB General Services and Security Co., Ltd., Krung Thai Asset Management Plc., KTB Computer Services Co., Ltd., KTB Leasing Co., Ltd., KTB Advisory Co., Ltd., Krungthai Card Plc. and Infinitas by Krungthai Co. , Ltd. The financial statements of the subsidiaries are prepared for the same reporting period as the Bank, using the same significant accounting policies. In cases where there are different accounting policies, the Bank has adjusted the effect of these differences in the consolidated financial statements. 1 206

The percentages of shareholdings and investments in the Bank's subsidiaries and associated companies are shown in Note 9.7 to the consolidated financial statement. Investments in associated companies are accounted in the consolidated financial statements using the equity method. The separate financial statements Investments in subsidiaries and associated companies are accounted for in the separate financial statements using the cost method. The Bank's financial statements for the year ended 31 December 2020 and 2019 included the accounts of domestic and foreign branches, after eliminating the effects of all interbranch transactions. The English language financial statements The financial statements in Thai language are the official statutory financial statements of the Bank. The financial statements in English language has been translated from the Thai language financial statements. In case of a conflict or a difference in interpretation between the two languages, the Thai language financial statements shall prevail.

During the year, the Bank and its subsidiaries have adopted the revised (revised 2019) and new financial reporting standards and interpretations which are effective for fiscal years beginning on or after 1 January 2020. These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards with most of the changes directed towards clarifying accounting treatment and providing accounting guidance for users of the standards. However, the new financial reporting standards that involve changes to key principles are summarised below;

Financial reporting standards related to financial instruments A set of TFRSs related to financial instruments, consisting of five accounting standards and interpretations, as follows: Financial reporting standards:

TFRS 7 Financial Instruments: Disclosures TFRS 9 Financial Instruments

Accounting standard:

TAS 32 Financial Instruments: Presentation

Financial Reporting Standard Interpretations:

TFRIC 16 Hedges of a Net Investment in a Foreign Operation TFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

2 Annual Report 2020 207

These TFRSs related to financial instruments make stipulations relating to the classification of financial instruments and their measurement at fair value or amortised cost ( taking into account the type of instrument, the characteristics of the contractual cash flows and the Entity’s business model), calculation of impairment using the expected credit losses method, and hedge accounting. These include stipulations regarding the presentation and disclosure of financial instruments.

The impact of the adoption of these set of financial reporting standards on the financial statements of the Bank and its subsidiaries are as follows:

Classification and measurement of financial assets and financial liabilities

Financial assets - debt instruments

The Bank and its subsidiaries classify their financial assets - debt instruments as subsequently measured at amortised cost or fair value in accordance with the Bank’s and its subsidiaries’ business model for managing the financial assets and the contractual cash flows characteristics of the financial assets as follows:

- Financial assets measured at amortised cost only if both following conditions are met: the financial assets is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the contractual terms of the financial assets represent contractual cash flows that are solely payments of principal and interest on the principal amount outstanding.

- Financial assets measured at fair value through other comprehensive income only if both following conditions are met: the financial assets is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets as well as the contractual terms of the financial assets represent contractual cash flows that are solely payments of principal and interest on the principal amount outstanding.

- Financial assets measured at fair value through profit or loss unless the financial assets is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows or, the contractual terms of the financial assets represent contractual cash flows that are solely payments of principal and interest on the principal amount outstanding.

Despite the foregoing, this financial assets - debt instruments may be irrevocably designated as measured at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch.

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Investment in equity instruments

All equity investments are measured at fair value in the statement of financial position. The Bank and its subsidiaries have classified equity investments as the financial assets measured at fair value through other comprehensive income, except for those equity investments measured at fair value through profit or loss in accordance with the Bank’s and its subsidiaries’ Investment Policy.

The management of the Bank and its subsidiaries reviewed and assessed the Bank’s and its subsidiaries’ existing financial assets as at 1 January 2020 based on the facts and circumstances that existed at that date and concluded the following significant changes on the Bank’s and its subsidiaries’ financial assets as regards their classification and measurement:

- The held-to-maturity and available-for-sale investment in debt securities as well as available-for-sale and general investment in equity securities are removed.

- Classify almost held-to-maturity debt securities to be financial assets measured at amortised cost.

- Classify almost available-for-sale debt securities to be financial assets measured at fair value through other comprehensive income.

- Classify almost investment in equity securities to be financial assets measured at fair value through other comprehensive income except for some that are classified to be financial assets measured at fair value through profit or loss in accordance with the Bank’s and its subsidiaries’ Investment Policy, or some items that are classified as ‘Debt’ in accordance with the financial reporting standards and their contractual cash flows are not solely payments of principal and interest on the principal amount outstanding.

- The investment in equity securities which are elected to be measured at fair value through other comprehensive income cannot be subsequently revoked. All gains and losses are presented in other comprehensive income except for dividend which is recognised in profit or loss.

- Initially recognise the whole derivatives for banking book at their fair value on the contract date and subsequently measure them at fair value at the end of each reporting period. Changes in the fair value of derivatives are recognised in profit or loss. The Bank and its subsidiaries apply hedge accounting for certain derivatives. Financial liabilities The adoption of these set of financial reporting standards does not impact to the Bank’s and its subsidiaries’ classification of financial liabilities. The Bank and its subsidiaries continue to be classified all financial liabilities as measured at amortised cost. 4 Annual Report 2020 209

Impairment of financial assets

The TFRS 9 sets out an entity estimates the expected credit losses instead of recognising its incurred losses under previous accounting policy. This financial reporting standard requires to recognise impairment by based on an Expected Credit Losses model and management overlay due to the limitations of the model and requires the Bank and its subsidiaries to recognise an allowance for expected credit losses for all loans to customers and investments in debt securities which are not measured at fair value through profit or loss, together with loan commitments and financial guarantee contracts. The allowance is measured at the amount equal to 12-month expected credit losses, except for the case that there has been a significant increase in credit risk since initial recognition and financial assets that are credit-impaired, the allowance is measured at the amount equal to the lifetime expected credit losses of financial instrument. In addition, TFRS 9 also requires a simplified approach for measuring the loss allowance at an amount equal to lifetime expected credit losses for trade receivables, contract assets and lease receivables in certain circumstances.

Hedge accounting

The general hedge accounting requirements aims to align the accounting with risk management strategy, permitting to have a greater variety of hedging instruments and risks being hedged, however they do not explicitly address hedge accounting for Dynamic Risk Management, as a result included an accounting policy choice to remain with the existing accounting practice.

Transition

The Bank and its subsidiaries adopted a set of financial reporting standards related to financial instruments by recognising the cumulative effects of the first-time adoption of these set of financial reporting standards as an adjustment to the retained earnings or other components of equity as at 1 January 2020. The comparative information was not restated; therefore, the presentation of the year 2019 is not comparable with the presentation of the year 2020.

The cumulative effect of the changes is described in Note 6 to the consolidated financial statements.

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TFRS 16 Leases

TFRS 16 supersedes TAS 17 Leases together with related Interpretations. The financial reporting standard sets out the principles for the recognition, measurement, presentation and disclosure of leases, and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is low value.

Accounting by lessors under TFRS 16 is substantially unchanged from TAS 17. Lessors will continue to classify leases as either operating or finance leases.

The Bank and its subsidiaries adopted this financial reporting standard using the modified retrospective method of initial adoption of which the cumulative effect is recognised as an adjustment to the retained earnings as at 1 January 2020, and the comparative information was not restated.

The cumulative effect of the changes is described in Note 6 to the consolidated financial statements.

Accounting Guidance on Temporary Relief Measures for Entities Providing Assistance to Debtors Impacted by Situations That Affect the Thai Economy

The Federation of Accounting Professions announced Accounting Guidance on Temporary Relief Measures for Entities Providing Assistance to Debtors Impacted by Situations That Affect the Thai Economy. Its objectives are to provide temporary relief measures solely for entities providing assistance to debtors impacted by the situations that affect the Thai economy, such as COVID- 19, economic conditions, trade wars and drought, and to provide an alternative for all entities providing assistance to debtors in accordance with measures to assist debtors specified in the circular of the Bank of Thailand No. BOT.RPD.(23)C. 276/2563 “ Guidelines on providing assistance to debtors impacted by situations that affect the Thai economy” and the circular of the Bank of Thailand No. BOT.RPD.(01)C. 380/2563 “Measures to provide additional assistance to debtors during the COVID- 19 situation” or any other measures announced by the Bank of Thailand. Such entities include credit card businesses, businesses providing loans secured against vehicle registrations without collateral, personal loan businesses under the supervision of the Bank of Thailand and certain entities not under the supervision of the Bank of Thailand, such as leasing, hire- purchase, motorcycle hire- purchase and factoring businesses. Entities providing assistance to debtors in accordance with the Bank of Thailand’ s measures and electing to apply this Accounting Guidance have to apply all temporary relief measures specified in this guidance.

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On 22 April 2020, the Accounting Guidance was announced in the Royal Gazette and it is effective for entities providing assistance to debtors impacted by situations that affect the Thai economy with the helping period during the period from 1 January 2020 to 31 December 2021 or until there are any changes from the Bank of Thailand, which require the compliance for such changes. The guidance applies to large- sized debtors, small and medium- sized debtors, and retail debtors who have the ability to run a business or to repay debts in the future and have been impacted directly or indirectly by such situations, considering the following guidelines.

- Debtors who were not yet non-performing (Stage 1 or Stage 2) on or after 1 January 2020

- Debtors who became non-performing (Stage 3) on or after 1 January 2019, unless the entity is able to prove that the debtors becoming non-performing before 1 January 2019 are non-performing loans affected by the economic conditions

An entity provides assistance to affected debtors in accordance with the Bank of Thailand’ s guidelines applies these following procedures.

- Loans that are not yet non-performing (Non-NPL) are classified as loans where there has not been a significant increase in credit risk (Performing or Stage 1), provided that analysis of its status and business shows that the debtor is able to comply with the debt restructuring agreement without compliance monitoring. Such debt restructuring is considered a pre-emptive debt restructuring rather than a troubled debt restructuring. If it is a provision of assistance to debtors in accordance with the circular of the Bank of Thailand No. BOT.RPD.(01)C. 380/2563, stage classification of the debtor remains at the same stage as before.

- Non-performing loans (NPL) are classified as performing loans if the debtor is able to make repayment in accordance with the debt restructuring agreement for 3 months or 3 installments consecutively, whichever is the longer period.

- Additional working capital loans provided to a debtor in order to support liquidity and enable the debtor to continue run its business operations during the debt restructuring are classified by account level if the debtor has cash flows to support its repayment or if, considering other factors, the debtor has ability to repay its debts.

- The guidelines specified in the appendix of the circular of the Bank of Thailand No. BOT.RPD.(23)C. 276/2563 relating to assessment of whether there has been a significant increase in credit risk are initially applied to assess whether a debtor is moving to Stage 2.

- Expected credit losses are determined based on the outstanding balance of the drawn down portion only.

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- A newly calculated effective interest rate is applied to determine the present value of loans that have been restructured in accordance with guidelines to assist debtors specified in the circulars of the Bank of Thailand, if the debt restructuring causes the existing effective interest rate to no longer reflect the estimated cash inflows from the loan. In addition, if it is a provision of assistance to debtors in accordance with the circular of the Bank of Thailand No. BOT.RPD.(01)C. 380/2563, an entity recognises its interest income during the repayment holiday using the new calculated effective interest rate, or set out by Bank of Thailand’s guidelines if there are changes. - Consideration is given to placing less weighted on forward-looking information that is the result of the temporary crisis than on information reflecting ability of debt payment from historical experience, in cases where a general approach is used in determining expected credit losses. As at 31 December 2020, there are loans to customers including loans with modification of contracts, that the Bank and its subsidiaries have elected to adopt this accounting guidance in the preparation of the financial statements, representing 16 percent of total loans. Accounting Guidance on Temporary Relief Measures for Accounting Alternatives in Response to the Impact of the COVID-19 Pandemic The Federation of Accounting Professions announced Accounting Guidance on Temporary Relief Measures for Accounting Alternatives in Response to the Impact of the COVID- 19 Pandemic. Its objectives are to alleviate some of the impact of applying certain financial reporting standards, and to provide clarification about accounting treatments during the period of uncertainty relating to this situation. On 22 April 2020, the Accounting Guidance was announced in the Royal Gazette and it is effective for the financial statements prepared for reporting periods ending between 1 January 2020 and 31 December 2020. The Bank and its subsidiaries have not adopted such accounting guidance in the preparation of the financial statements for the year ended 31 December 2020.

The Federation of Accounting Professions issued a number of revised financial reporting standards and interpretations, which are effective for fiscal years beginning on or after 1 January 2021. These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards with most of the changes directed towards clarifying accounting treatment and providing accounting guidance for users of the standards. The management of the Bank and its subsidiaries is currently evaluating the impact of these financial reporting standards to the financial statements in the year when they are adopted.

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Interest income

Accounting policies that are effective since 1 January 2020

The Bank and its subsidiaries recognise interest income by using the Effective Interest Rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument or, when appropriate, a shorter period, to the net carrying amount of the financial asset. The effective interest rate is calculated by taking into account any discount or premium on acquisition, fees and costs that are an integral part of the effective interest rate.

The Bank and its subsidiaries calculate interest income by applying the effective interest rate to the gross carrying amount of financial assets. When a financial asset becomes credit- impaired, the Bank and its subsidiaries calculate interest income by applying the effective interest rate to the net carrying amount (gross carrying amount net of allowance for expected credit losses) of the financial asset. If the financial asset is no longer credit- impaired, the Bank and its subsidiaries revert to calculating interest income on a gross carrying amount.

Accounting policies that are applied before 1 January 2020

Interest income is recognised on an accrual basis, except for interest on loans classified as delinquent over 3 months and interest on loans under troubled debt restructuring contract which would be reversed. In accordance with the BOT's regulations, interest income on delinquent loans over 3 months from the due date that had been recognised as an income since 1 January 2000 would be reversed and recognised as income upon receipt.

Fee and service income

Accounting policies that are effective since 1 January 2020

Unless included in the effective interest rate calculation, the Bank and its subsidiaries recognise fee income on an accrual basis when the service has been provided or upon satisfaction of performance obligations.

Accounting policies that are applied before 1 January 2020

Fees and Service Income is recognised when the related services are performed.

Dividend Income

Dividend income from investments is recognised when declared.

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Interest expenses, fees and service expenses, and other operating expenses, are recognised on an accrual basis.

Net gains ( losses) from financial instruments measured at fair value through profit or loss consist of gains (losses) on trading and foreign exchange transactions, gains (losses) from changes in the fair value of derivatives and financial assets designated at fair value through profit or loss, gains ( losses) from sales of financial assets measured at fair value through profit or loss, and derivatives, and net gains (losses) from hedge accounting. The Bank and its subsidiaries recognise them as income or expenses on the transaction date.

Cash and cash equivalents represent cash in hand and cash on collection

Accounting policies that are effective since 1 January 2020

Derivatives are initially recorded at fair value at the date on which a derivative contract is entered into (Trade Date) and are classified as trading, except for where they are designated as a part of an effective hedge relationship and classified as hedging derivatives. Derivatives are subsequently measured at fair value. The changes in fair value are recognised as gains ( losses) on financial instruments measured at fair value through profit or loss unless hedge accounting is applied. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.

Hedge accounting

The Bank and its subsidiaries make use of derivatives to manage exposures arising from assets, liabilities, off-balance sheet items, net position or cash flow. Hedging accounting can be applied for hedged items and hedging instruments. Upon meeting specified criteria for hedge accounting, the Bank and its subsidiaries apply hedge accounting for the aforementioned derivatives. The Bank and its subsidiaries designate certain derivatives as follow:

- Fair value hedges

- Cash flow hedges

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In hedging, the Bank and its subsidiaries take into consideration the relationship between hedging instruments and the hedged items, including the nature of the risk, the objective and strategy for undertaking the hedge as well as the effectiveness of the hedging relationship. Fair value hedges

The Bank and its subsidiaries recognise the movement in fair value of the hedged item and of the hedging instrument in profit or loss, except for the hedging transaction of investments in equity securities designated at fair value through other comprehensive income which is recognise the movement in fair value in the other comprehensive income that will be recognised at fair value movement of the hedged item and of the hedging instrument in other comprehensive income. The cumulative changes in the fair value attributable to the hedged risk of hedged item is made as an adjustment to the carrying value of the hedged assets or liabilities. The Bank adopts interest rate swap contract to hedge the risk from changes in fair value from interest rate of debt instruments issued and interbank and money market items (liabilities). The Bank performs hedge effectiveness test by comparing changes in fair value ( only a portion of risk being hedged) of hedged items with changes in fair value of hedging instruments. In addition, the Bank has also considered a qualitative approach by comparing the critical terms of significant characteristics such as cash flow, interest rate, and the duration of hedged items and hedging instruments that make perfectly match from the designation date. Causes of ineffectiveness of hedging could be arised from the differences in cash flow and the differences in time between hedged items and hedging instruments. The Bank adopts foreign currency forward contract and foreign currency swap contract to hedge risk from changes in fair value of foreign exchange rate risk of equity securities designated at fair value through other comprehensive income. The Bank performs hedge effectiveness test by comparing changes in fair value (only a portion of risk being hedged) of hedged items with changes in fair value of hedging instruments by excluding cost of hedging in the effectiveness test. In addition, the Bank has also considered a qualitative approach by comparing the critical terms of significant characteristics such as cash flow, interest rate, and the duration of hedged items and hedging instruments that make perfectly match from the designation date. Causes of ineffectiveness of hedging could be arised from the differences in cash flow and the differences in time between hedged items and hedging instruments.

When a hedging instrument expires, is sold, is terminated or is exercised, or when a hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item is amortised to the statement of comprehensive income using effective interest rate. Where the hedged item is derecognised from the statement of financial position, the unamortised fair value adjustment is immediately recognised in the statement of comprehensive income.

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Cash flow hedges

The Bank and its subsidiaries recognise an effective portion of the cumulative changes in the fair value of hedging instrument in the cash flow hedge reserve within equity. The gains or losses relating to the ineffective portion is immediately recognised in the statement of comprehensive income. The cash flow hedges reserve in equity are transferred to the statement of comprehensive income in the period( s) in which the hedged item affects the statement of comprehensive income.

The Bank adopts cross currency interest rate swap contracts to hedge the risk of cash flows from interest rate and foreign exchange rate of debt securities investments that are not measured at fair value through profit or loss. The Bank performs effectiveness test by comparing changes in fair value between hedged items by creating hypothetical derivative and changes in fair value of hedging instrument by excluding cost of hedging in the effectiveness test. In addition, the Bank has also considered a qualitative approach by comparing critical terms of significant characteristics such as cash flow, interest rate, and the duration of heged items and hedging instruments that make perfectly match from the transaction date. Causes of ineffectiveness of hedging could be arised from the differences in cash flow and the differences in time between hedged items and hedging instruments.

When a hedging instrument expires, is sold, is terminated or is exercised, or when a hedge no longer meets the criteria for hedge accounting, the cash flow hedges reserve in equity at that time remains in equity and is recognised in the statement of comprehensive income when the forecast transaction is ultimately recognised in the statement of comprehensive income. When a forecast transaction is no longer expected to occur, the cumulative gains or losses existing in equity at that time is immediately transferred to the statement of comprehensive income.

Dynamic Risk Management

The Bank adopts interest rate swap contracts as hedging instruments for dynamic risk management, which is in accordance with the characteristics described in TFRS 9. Therefore, derivatives, which have the propose of dynamic risk management, are recorded as off- balance items and presented on an accrual method. Interest rate components are presented on an accrual basis, similar to hedged assets or liabilities, that are considered as part of interest income or interest expenses throughout the contract period. Receivables and payables under swap contracts are presented at the net amount in the statement of financial position.

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Embedded derivatives

Embedded derivatives are component of hybrid or combined instruments that consist of non-derivative host contracts.

For derivatives embedded in financial assets host contracts, the entire hybrid contract, including all embedded features, are classified in accordance with the Bank’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.

For derivatives embeded in financial liabilities host contracts, embedded derivatives will be separated from the host contract and accounted for as derivatives if all of the following criterial are met:

- Their economic characteristics and risks are not closely related to those of the host contract

- When separated from the host contract would still meet the definition of derivative and

- The hybrid contract is not recognised and measured at fair value through profit or loss.

Accounting policies that are effective before 1 January 2020

Accounting treatments for derivatives transactions depend on the purpose of the transactions as follows:

1) Trading Derivatives

The Bank measures derivatives at fair value and recognises gains or losses arising from changes in fair value included in gains ( losses) on tradings and foreign exchange transactions, net in the statements of profit or loss and other comprehensive income along with assets or liabilities in the statements of financial position.

2) Hedging Derivatives

The Bank manages its banking exposure to market rate movements through the use of derivatives and recognises gains or losses arising from changes in fair value of derivatives in accordance with the standard accounting treatment for income or expenses on hedged items.

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Accounting policies that are effective since 1 January 2020

Recognition of financial instruments

The Bank and its subsidiaries recognise financial assets or financial liabilities when the Bank and its subsidiaries become a party to the contractual provisions of the financial instruments.

Classification and measurement of financial assets and financial liabilities

Financial assets - debt instruments

The Bank and its subsidiaries classify its financial assets - debt instruments as subsequently measured at amortised cost or fair value in accordance with the Bank’s and its subsidiaries’ business model for managing the financial assets and the contractual cash flows characteristics of the financial assets as follows:

- Financial assets measured at amortised cost only if both following conditions are met: the financial asset is held within a business model whose objective is to hold financial asset in order to collect contractual cash flows and the contractual terms of the financial assets represent contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. These financial assets are initially recognised at fair value on trade date and subsequently measured at amortised cost net of allowance for expected credit losses (if any).

- Financial assets measured at fair value through other comprehensive income only if both following conditions are met: the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial asset as well as the contractual terms of the financial assets represent contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. These financial assets are initially recognised at fair value and subsequently measured at fair value. The unrealised gains or losses from changes in their fair value are reported as a component of shareholders’ equity through other comprehensive income until realised, after which such gains or losses on disposal of the instruments will be recognised as gains or losses in income statement. The gains or losses on foreign exchange, expected credit losses, and interest income which calculated using the effective interest rate method are recognised in profit or loss.

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- Financial assets measured at fair value through profit or loss unless the financial asset is held within a business model whose objective is to hold financial asset in order to collect contractual cash flows or, the contractual terms of the financial assets represent contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. These financial assets are initially recognised at fair value and are subsequently measured at fair value. Unrealised gains and losses from changes in fair value, and gains and losses on disposal of instruments are recognised as gains (losses) on financial instruments measured at fair value through profit or loss.

Investment in equity instruments

The Bank and its subsidiaries have classified investment in equity securities that not held for trading but held for strategic purposes or for securities with potential for high market volatility as the financial assets measured at fair value through other comprehensive income, where an irrevocable election has been made by the management. Such classification is determined on an instrument-by-instrument basis. Gains and losses arising from changes in fair value is recognised in other comprehensive income and not subsequently reclassified to profit or loss when disposal, instead, it is transferred to retained earnings. Dividends on these investments are recognised in profit or loss, unless the dividends clearly represent a recovery of part of the cost of the investment.

Financial liabilities

The Bank and its subsidiaries classify financial liabilities as measured at amortised cost. Financial liabilities are initially recognised at fair value and subsequently measured at amortised cost.

Modifications of financial instrument not measured at fair value

Financial assets

If the terms of a financial asset are modified, the Bank and its subsidiaries evaluate whether the cash flows of the modified financial asset are different form the original financial assets significantly. The original financial asset is derecognised and a new financial asset is recognised at fair value. The difference between the carrying amount of the financial asset extinguished and the new financial asset is recognised in profit or loss as a part of impairment losses.

If the cash flows of the modified financial asset are not substantially different, the Bank and its subsidiaries recalculate the gross carrying amount of the financial asset and recognise the amount arising from adjusting the gross carrying amount as a modification gains or losses in profit or loss which is presented as impairment losses.

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Financial liabilities

The Bank and its subsidiaries derecognise a financial liability when its terms are modified, and the cash flows of the modified financial liability are substantially different. A new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability is recognised in profit or loss.

If the cash flows of the modified financial liability are not substantially different, the Bank and its subsidiaries adjust the carrying amount of the financial liability to reflect the net present value of the revised cash flows discounted at the original effective interest rate and recognises the amount arising from adjusting the carrying amount as a modification gains or losses.

Derecognition of financial instruments

The Bank and its subsidiaries derecognise a financial asset when the contractual cash flows from the asset expire or it transfers its rights to receive contractual cash flows on the financial asset in a transaction in which all or substantially all the risks and rewards of ownership are transferred. Any interest from transferred financial assets, which is created or retained by the Bank and its subsidiaries, are recognised separately as asset or liability.

A financial liability is derecognised from the statement of financial position when the Bank and its subsidiaries have discharged its obligation, or the contract is cancelled or expires.

Write-off

Debts that are determined to be irrecoverable are written off (either partially or in full) in the period in which the decision is taken. This is generally the case when the Bank and its subsidiaries determine that the borrower does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off are still subject to enforcement activities in order to comply with the Bank’s and its subsidiaries’ procedures for recovery of amount due.

Investments in subsidiaries and associated companies in the separate financial statements are accounted for under the cost method net of allowance for impairment (if any). Losses on impairment is recognised as expenses in part of profit or loss in the statements of comprehensive income. Investments in associated companies in the consolidated financial statements are accounted for under the equity method. Under this method, investments are initially recorded at acquisition cost and are adjusted to reflect the attributable shares of the net income from the operations of the associated companies, in proportion to the investment.

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Accounting policies that are applied before 1 January 2020

4.8.1 Basis of Classification of Investments

The Bank and its subsidiaries classify their investments in debt securities and equity securities as trading securities, available-for-sale securities, held-to-maturity debt securities, or investments in subsidiaries and associates. Non-marketable equity securities are classified as general investments.

4.8.2 Basis of Valuation of Investments

Investments in marketable debt or equity securities classified as trading securities are stated at fair value. Unrealised gains or losses arising from the revaluation are recorded through gains (losses) on tradings and foreign exchange transactions, net in the statements of profit or loss and other comprehensive income.

Investments in marketable debt or equity securities classified as available-for-sale securities are stated at fair value, net of allowance for impairment ( if any). Unrealised gains or losses arising from the revaluation are separately shown in other components of equity and realised gains or losses after the disposal.

Investments in debt securities classified as held-to-maturity are stated at the amortised cost, net of allowance for impairment ( if any). Premiums or discounts on held- to- maturity debt securities are adjusted to interest income at the end of each month by using the straight-line method which is immaterially different from using the effective interest rate method.

General investments are stated at cost, net of allowance for impairment (if any). Losses on impairment are realised through gains (losses) on investments, net in the statements of profit or loss and other comprehensive income.

Investments in marketable unit trust classified as trading and available-for-sale securities are stated at fair value whereas investments in non-marketable unit trust are stated at net asset value. Investments in foreign asset- backed debt securities classified as trading securities- current investments are stated at fair value. The cost of disposed investments is calculated by the weighted- average method. Gains or losses on disposal of investments are presented in gains (losses) on investments, net in the statements of profit or loss and other comprehensive income, except for trading securities are presented in gains on tradings and foreign exchange transactions, net.

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Accounting policies that are applied before 1 January 2020 Loans represent the outstanding principal amounts, except for overdrafts including accrued interest receivables. Deferred revenue is presented as deduction from the loans. Hire- purchase and financial lease receivables represent the outstanding amounts, less deferred interest receivables, and deferred commission, plus amortised direct expenses.

Accounting policies that are effective since 1 January 2020 The Bank and its subsidiaries recognise expected credit losses of financial assets - debt instruments which are interbank and money market items ( assets), loans to customers and investments in debt securities, together with loan commitments and financial guarantee contracts, which are measured at amortised cost or fair value through other comprehensive income using the General Approach. The Bank and its subsidiaries classify their financial assets into three stages based on the changes in credit risk since initial recognition as follow: Stage 1: Financial assets where there has not been a significant increase in credit risk (Performing)

For credit exposures where there has not been a significant increase in credit risk since initial recognition and that are not credit- impaired upon origination, the Bank and its subsidiaries recognise allowance for expected credit losses at the amount equal to the expected credit losses in the next 12 months. The Bank and its subsidiaries will use a probability of default that corresponds to remaining maturity for financial assets with a remaining maturity of less than 12 months. Stage 2: Financial assets where there has been a significant increase in credit risk (Under- Performing) For credit exposures where there has been a significant increase in credit risk since initial recognition but that are not credit impaired, the Bank and its subsidiaries recognise allowance for expected credit losses at the amount equal to the lifetime expected credit losses of financial assets.

Stage 3: Financial assets that are credit-impaired (Non-Performing) Financial assets are assessed as credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of that asset have occurred. For financial assets that have become credit- impaired, the Bank and its subsidiaries recognise allowance for expected credit losses at the amount equal to the lifetime expected credit losses of financial assets.

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At every reporting date, the Bank and its subsidiaries assess whether there has been a significant increase in credit risk of financial assets since initial recognition by comparing the risk of default over the expected lifetime at the reporting date with the credit risk at the date of initial recognition. In determining whether credit risk has increased significantly since initial recognition, the Bank and its subsidiaries use internal quantitative and qualitative indicators, and forecasts information to assess the deterioration in credit quality of financial assets such as arrears of over 30 days past due, forbearance status for debt restructuring agreements, loans on the Early warning sign, loans that are classified as High Risk group and that are closely monitored by management, a changes of internal credit rating of the borrower since initial recognition, and issuer credit rating as either ‘non-investment grade’ or ‘no rating’ for investments in debt securities, etc.

The Bank and its subsidiaries assess whether the credit risk has increased significantly from the date of initial recognition on an individual or collective basis. In order to perform collective evaluation of impairment, the Bank and its subsidiaries classify financial assets on the basis of shared credit risk characteristics, taking into account type of instrument, internal credit ratings, overdue status, and other relevant factors.

Financial assets are assessed to be credit- impaired when one or more events that have a detrimental impact on the estimated future cash flows of the counterparties have occurred. Evidence of credit- impaired financial assets includes arrears of over 90 days past due or having indications that the borrower is experiencing significant financial difficulty, a breach of contract, bankruptcy or distressed restructuring.

A loan to customer that has been renegotiated due to a deterioration in the borrower’ s condition is usually considered to be significant increase in credit risk or credit- impaired unless there is evidence that the risk of not receiving contractual cash flows has reduced significantly and there are no other indicators of impairment.

The Bank and its subsidiaries consider their historical loss experience, adjusts with the current observable data and add on the reasonable and supportable forecasts of future economic conditions, including appropriate use of judgement, to estimate the amount of an expected credit losses. The Bank and its subsidiaries determine both current and future economic scenario, and probability- weighted in each scenario ( base scenario, upturn scenario and downturn scenario) for calculating expected credit losses. The use of macroeconomic factors which major are include, but is not limited to, unemployment rate and property price index, etc. The Bank and its subsidiaries have established the process to review and monitor methodologies, assumptions and forward- looking macroeconomics scenarios on a yearly basis.

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In the case of investment in debt securities measured at fair value through other comprehensive income, the Bank and its subsidiaries recognise impairment charge in profit and loss as expected credit losses and the corresponding allowance for expected credit losses in other comprehensive income, whereas the carrying amount of the investments in debt securities in the statement of financial position still present at fair value.

The measurement of expected credit losses for loan commitments is the present value difference between the contractual cash flows that are due to the Bank if the commitment is drawn down and the cash flows that the Bank and its subsidiaries expect to receive. The measurement of expected credit losses for financial guarantees is based on the expected payments to reimburse the holder less any amounts that the Bank and its subsidiaries expect to recover.

In addition, a subsidiary of the Bank recognises allowance for expected credit losses of finance lease receivables using Simplified Approach. The subsidiary recognises allowance for expected credit losses at an amount equal to lifetime expected credit losses.

Increase (decrease) in an allowance for expected credit losses is recognised as expenses during the period in profit or loss in the statements of comprehensive income.

Accounting policies that are effective before 1 January 2020

The Bank and its subsidiaries which operate the loan provider business recognise allowance for doubtful accounts compliance with the BOT's Notification No. SOR NOR SOR.5/2559 dated 10 June 2016, regarding Regulations on Assets Classification and Provision of Financial Institutions based on the BOT's Regulations on Valuation and Appraisal of Collateral and Immovable Properties for Sale acquired through Debt Repayment, Loan Collateral or Public Auction of Financial Institution dated 10 June 2016, summarised as follows:

1) The Bank has set aside provision for normal and special mention categories at 1 percent and 2 percent, respectively, in accordance with the BOT’ s regulations. The Bank also applies collective approach to set aside provision for each debtor group, grouping by similar credit risk.

2) Provision for impaired-debtors is at 100 percent of the difference between the book value of loans and the present value of expected cash flows from the disposals of collateral as to the practice stipulated by the BOT.

20 Annual Report 2020 225

3) Collateral using for calculating the present value of expected cash flows from disposals are such as immovable properties and leasehold rights ( e. g. the present value of the expected cash flows from disposals of immovable properties which are collateral of debtors under the litigation process equal to 62.03 percent of the appraisal value and the present value of the expected cash flows from disposals of immovable properties which are collateral of debtors under the public auction process equal to 66. 38 percent of the appraisal value). Other types of collateral are calculated by using the valuation rate stipulated by the BOT.

4) Collateral valuation has been conducted according to the BOT's regulations relating to types of collateral, valuation methodology, valuation frequency, and values of collateral that could be deductible from loans balances before provisioning as follows:

- As for normal and special mention categories, the underlying collateral is required to reappraise or revalue on a 3-year basis excluding collateral of credit lines of housing loans and other loans in the charge of retail business and network support team, will be reappraised or revalued when changed to substandard, doubtful and doubtful of loss, as well as the collateral which have been reappraised or revalued over the past 3 years.

- As for substandard, doubtful and doubtful of loss categories are required to reappraise or revalue collaterals by using the methods stipulated by the BOT. Immovable properties collaterals are required to reappraise or revalue on a 3- years basis as minimum. In case of near cash collateral such as marketable securities, is required to reappraise or revalue at the end of the accounting period.

Bad debts written-off and bad debts recovered are either deducted from or added to the allowance for doubtful accounts, whichever the case may be. The Bank defines debt write off guidelines which any debtors classified as doubtful of loss are written off at the underlying value of irrecoverable provision in line with the BOT’s debt write off regulations. Bad debts recovered from subsidiary that operates credit cards business will recognise in other operating income.

21 226

Accounting policies that are effective since 1 January 2020

Debt restructuring of non-performing loans (Stage 3) is considered a troubled debt restructuring regardless of whether losses are incurred from the restructuring in accordance with the Bank of Thailand’s guideline of debt restructuring. The Bank and its subsidiaries determine the present value of the expected future cash flows to be received based on the terms of the new debt restructuring agreement, discounted by the loan’s original effective interest rate. The difference between the outstanding loan balance and the present value of the expected future cash flows is recognised under gains (losses) on term modifications of contracts and treated as expected credit losses in profit or loss on the debt restructuring date.

Accounting policies that are effective before 1 January 2020

The Bank has a policy of managing weak or non-performing debt with the main focus on restoring the customer's business to be able to return to normal business first. But if unable to do so, there is a policy on debt restructuring by reducing the principal and/or accrued interest that has already been recorded as income, reducing interest rates, converting debt to equity or convertible debt, extending the repayment period, adjusting short-term debt to long term, providing grace period for principle and/or interest, accepting the transfer of assets as collateral, accepting the transfer of assets that are not assets as collateral, and accepting the transfer of assets by having the contract for right of the debtor to buy property back within the specified period or grant the debtor the right to buy property back before other persons (First Right of Refusal) or may be the deficiency transfer to the Bank in order to reduce the burden of the Bank and the customers' damages.

For calculating the debt restructuring losses are as the following procedures:

1) The consent to relaxation of debt settlement conditions to the debtor without reducing the principal and interest owed before debt restructuring, The Bank calculates the present value of the expected cash flow by using specified interest rate in the debt restructuring agreement as a discount rate. In case that the interest rate under debt restructuring agreement is lower than the finance cost, the Bank will use the finance cost rate as a discount rate instead. And when the present value of such calculated cash flows is lower than the book value (Principal including accrued interest recorded in the debtor's account), the Bank will record the reserve for loss from debt restructuring in the statement of income and other comprehensive income for that period.

The financial cost component is the weighted average cost of deposits and borrowings, Money remitted to the Bank of Thailand and the Deposit Protection Agency, including liquidity reserve expenses.

22 Annual Report 2020 227

2) Agreement to reduce the principal and interest owed before debt restructuring or accepting debt repayment by accepting asset transfers, financial instruments or accepting capital from debtors which come from debt to equity conversion and relaxing conditions for repayment of the remaining debt to the debtor. The Bank will write-off the accounts receivable balance and immediately record the loss incurred in the statement of income and other comprehensive income after transferring has been accepted by concerning the initial allowance of doubtful accounts. The Bank will record the transferred assets in an amount not higher than the book value of the debtor, including the accrued interest receivables that the Bank is entitled to receive under the law.

In the case of receiving partial repayment by asset transferring of Debtor's financial instrument or equity received from debt to equity conversion for debt settlement under the debt restructuring agreement. The Bank will comply with number 2) first, for the remainder of the debt, if there is a relief in the payment terms, the Bank will follow number 1).

Properties for sale is stated at the lower of cost or net realisable value, which is determined with reference to the latest appraisal value less estimated selling expenses, adjusts these in accordance with the BOT’s guideline and taking into consideration the type and the nature of the assets. The Bank recognises losses on impairment as other operating expenses or income in the statement of comprehensive income. Net gains or losses on disposals of those properties for sale after deducting selling expenses are recognised as other operating income or expenses in the statement of comprehensive income, except for sales that allow buyer to borrow money which gains or losses on disposals will be recognised in accordance with the BOT’s guideline.

According to the BOT's Policy No. THOR POR THOR. PHOR NOR SOR. (23) WOR.575/2562 dated 8 May 2019, regarding Delivery Policy of Appraisal Guarantee and Properties for Sale acquired through Debt Repayment, Loan Collateral or Public Auction of Financial Institutions, all properties for sale are appraised by the external appraisers. Except for properties for sale in risk areas in the southern region (Pattani, Yala, Narathiwat and Sadao District of Songkhla) with a book value of less than Baht 50 million, appraised by an internal appraiser or an external appraiser on a case-by-case basis.

23 228

Land is presented at revalued amount. Premises and equipment are stated at cost less accumulated depreciation and allowance for impairment (if any). Land is revalued on a 3 - 5 years basis by independent appraisers in accordance with the BOT’s regulations so that the book value at the end of the reporting period is not significantly different from fair value.

The Bank and its subsidiaries recognise the differences arising from the revaluation as follows:

- When an asset’s carrying amount is increased as a result of the revaluation, the increase is credited directly to other comprehensive income and the cumulative increase is recognised in equity under the heading of “Surplus on revaluation of assets”. However, the revaluation increase is recognised as income to the extent that it reverses the revaluation decrease in respect of the same asset previously recognised as an expense.

- When an asset’s carrying amount is decreased as a result of the revaluation, the decrease is recognised in profit or loss. However, the revaluation decrease is charged to other comprehensive income to the extent that it does not exceed the amount already held in “Surplus on revaluation of assets” in respect of the same asset.

The Bank and its subsidiaries write- off assets with additional appraisal when disposal or expected no future economic benefits from the use or disposal assets. The surplus from the revaluation of assets outstanding at the write- off date is transferred directly to retained earnings.

Depreciation of premises is calculated on the straight- line basis over their useful lives. Since 1 April 2012, depreciation of premises is calculated on the straight-line basis over their residual useful lives not over 50 years which appraised by independent expert appraisers. Before 1 April 2012, depreciation of premises is calculated on the straight- line basis over their useful lives of 20 years.

Depreciation of equipment is calculated on the straight- line basis over their useful lives of 5 years. Equipment with an acquisition cost not exceeding Baht 3,000 is charged directly to expense in the period of acquisition. The amounts of those transactions have no significant effect to the Bank's financial statements.

Depreciation method, useful lives, and residual value are annually reviewed.

No depreciation is provided on assets under installation.

24 Annual Report 2020 229

Intangible assets, comprising computer software, licenses and development costs are presented at cost net accumulated amortisation and allowance for impairment (if any). Amortisation is calculated by the straight-line basis over their useful lives and recognised as expenses in the statements of comprehensive income.

The Bank and its subsidiaries amortised intangible assets with finite lives on a systematic basis over their economic useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The Bank and its subsidiaries will review amortisation period and the amortisation method of such intangible assets at least at each financial year end.

The intangible assets with finite useful lives have useful lives of approximately 3 - 10 years.

No amortisation for computer software under development.

The Bank enters into agreements with private entities to purchase/ sell securities whereby there is an agreement to resell/ repurchase the securities at certain dates and at fixed price. Amounts paid for the securities purchased under resale agreement are presented as assets under the caption of interbank and money market items or loans to customers, depending on the counterparty, and the underlying securities are treated as collateral to such receivables. The securities sold under repurchase agreement at the amounts received are presented as liabilities under the caption of interbank and money market items in the statement of financial position and the underlying securities are treated as collateral.

For outstanding balances of assets at each reporting date, the Bank and its subsidiaries review the impairment of assets by items when there is an indication that the book value of those assets is higher than the expected recoverable amounts. As such, losses on impairment will be realised as other operating expenses. The reversal of losses on impairment will be recorded only when there is an indication that such impairment no longer exists or shown at a declining balance, if any, and reversed to other operating income in the statements of profit or loss and other comprehensive income. Except for the case that reversal of the revalued increased of the same assets that used to be recognised in equity, when impairment occurred latterly it will be recognised in equity.

25 230

Related parties comprise persons or entities that control, or are controlled by, the Bank and its subsidiaries, whether directly or indirectly, or which are under common control with the Bank and its subsidiaries.

They also include associated companies and persons or entities which directly or indirectly own a voting interest in the Bank and its subsidiaries that give them significant influence over the Bank and its subsidiaries, key management personnel, directors and officers with authority in the planning and direction of the Bank’s and its subsidiaries’ operations.

Presentation currency

The consolidated and the separate financial statements are presented in Baht.

Foreign currency translation

Items denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the transaction dates. Balances of monetary assets and liabilities are translated by using the reference exchange rates of BOT as at the reporting date. Balances of non-monetary assets and liabilities are translated by using the exchange rates prevailing at the transaction dates or exchange rates at the date when the fair value was measured.

Gains or losses on foreign currency translation are presented in the statements of comprehensive income as gains (losses) on financial instruments measured at fair value through profit or loss.

Foreign currency translation of foreign branches' financial statements

Items on the foreign branches' statements of financial position are translated into Baht by using the reference exchange rates of BOT as at the reporting date. The statements of comprehensive income are translated into Baht by using the exchange rate prevailing at the transaction dates or average exchange rates of that accounting period.

Gains or losses on translation of foreign branches' financial statements are presented in equity through other comprehensive income.

26 Annual Report 2020 231

Short-term employee benefits

The Bank and its subsidiaries recognised short-term employee benefits such as salary, wages, bonuses and contributions to the social security fund as expenses when received the services.

Post-employment benefits

Employees provident fund

The Bank established a provident fund under the Provident Fund Act B.E. 2530 (1987) and entered to the registered fund approved by the Ministry of Finance in 25 June 1992. The Provident Fund is managed by an external fund manager.

Permanent employees and employees under employment contracts of the Bank are entitled to apply for membership according to the registered KTB Provident Fund regulations. Employees could opt to contribute to the Fund at the rate of either 3, 6, 10, 12 or 15 percent of their basic salaries while the Bank's supplemental contribution is at 10 percent of each employees' basic salary.

Post-employment benefits under defined benefit plans

The Bank and its subsidiaries have obligations in respect of the severance payments they must make to employees upon retirement under labor law and other long-term employee benefit plans. The Bank and its subsidiaries treat these severance payment obligations as a defined benefit plans.

The obligation under the defined benefit plan and other long-term employee benefit plans are determined by a professionally qualified independent actuary based on actuarial techniques, using the projected unit credit method.

Actuarial gains and losses for defined benefit plan are recognised immediately in other comprehensive income.

Past service costs are recognised in profit or loss on the earlier of the date of the plan amendment or curtailment and the date that the Bank recognises restructuring-related costs.

27 232

Income tax expense represents the sum of current income tax and deferred tax. Current income tax Current income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on taxable profits determined in accordance with tax legislation. Deferred tax

Deferred tax is provided on temporary differences between the tax bases of assets and liabilities and their carrying amounts at the end of each reporting period, using the tax rates enacted at the end of the reporting period. The Bank and its subsidiaries recognise deferred tax liabilities for all taxable temporary differences while they recognise deferred tax assets for all deductible temporary differences and tax losses carried forward to the extent that it is probable that future taxable profit will be available against which such deductible temporary differences can be utilised. At each reporting date, the Bank and its subsidiaries review and reduce the carrying amount of deferred tax assets to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

The Bank and its subsidiaries record deferred tax directly to equity if the tax relates to items that are recorded directly to equity. Deferred income tax assets and deferred income tax liabilities must offset the transaction when the Bank has legal rights to offset current tax assets against current tax liabilities and this income tax is assessed by the same tax authority for the same tax unit.

Basic earnings per share is calculated by dividing the net profit for the year attributable to ordinary equity holders of the Bank after dividends on preferred share (if any) by the weighted average number of ordinary shares issued during the years.

Provisions are recognised when the Bank and subsidiaries have present legal or constructive obligations as a result of a past event, they are probable that an outflow of economic benefits will be required to settle the obligation, and the reliable estimate of the amounts can be made.

The Bank complies with the BOT's Notification No. SOR NOR SOR.23/2561 dated 31 October 2018, regarding Regulations on Assets Classification and Provision of Financial Institutions prescribed regulations to set aside provisions for commitment which is off-balance item.

28 Annual Report 2020 233

Subsidiary has customer loyalty programmes by offering reward points to customers together with services entitling customers to redeem those reward points to gifts or discount in the future. The Bank’s subsidiaries also allocate rewards or accrued rewards to the points by referring from fair value of accumulated points. Then, they are recognised to deferred revenue under “other liabilities” in the statements of financial position and shall be recognised to fees and service income when customers redeem.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Bank and its subsidiaries have considered fair value of individual financial instrument. Fair value of financial instruments is quoted prices (unadjusted) for similar assets or liabilities in active markets that the Bank and its subsidiaries are able to access. In case of there is no quoted prices in active markets, the Bank and its subsidiaries will use general accepted valuation technique by maximising observable inputs and minimising unobservable inputs in commonly used models or the Bank’s models. Those models are approved by the management and also regularly reviewed and updated.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy into three levels based on categorise of input to be used in fair value measurement as follows:

Level 1 - Use of quoted market prices for the same assets or liabilities in an observable active market

Level 2 - Use of other inputs that are observable for the assets or liabilities, whether directly or indirectly

Level 3 - Use of unobservable inputs such as estimates of future cash flows

At the end of each reporting period, the Bank and its subsidiaries determine whether transfers have occurred between levels within the fair value hierarchy for assets and liabilities held at the end of the reporting period that are measured at fair value on a recurring basis.

At inception of contract, the Bank and its subsidiaries assess whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

29 234

The Bank and its subsidiaries as lessees

The Bank and its subsidiaries applied a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. At the commencement date of the lease (i.e. the date the underlying asset is available for use), the Bank and its subsidiaries recognise right-of-use assets representing the right to use underlying assets and lease liabilities based on lease payments.

Right-of-use assets

Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses (if any), and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities initially recognised, initial direct costs incurred, and lease payments made at or before the commencement date of the lease less any lease incentives received.

Depreciation of right-of-use assets is calculated by reference to their costs, on the straight- line basis over the shorter of the lease term and the estimated useful lives as follows:

Premises 1 - 35 years

Office equipment 2 - 5 years

Motor vehicles 1 - 5 years

If the ownership of the leased asset transfers to the Bank and its subsidiaries at the end of the lease term or the cost of such assets reflect the exercise of a purchase option, depreciation is calculated using the estimated useful lives of assets.

The Bank and its subsidiaries have to assess the impairment of Right-of-use assets as mentioned in Note 4.16 to the consolidated financial statements regarding Impairment of non-financial assets.

Lease liabilities

Lease liabilities are measured at the present value of the lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be payable under residual value guarantees. Moreover, the lease payments include the exercise price of a purchase option reasonably certain to be exercised by the Bank and its subsidiaries and payments of penalties for terminating the lease, if the lease term reflects the Bank and its subsidiaries exercising an option to terminate.

Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs. 30 Annual Report 2020 235

The Bank and its subsidiaries discounted the present value of the lease payments by the interest rate implicit in the lease or the Bank and its subsidiaries’ s incremental borrowing rate. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a change in the lease term, a change in the lease payments or a change in the assessment of an option to purchase the underlying asset.

Short-term leases and Leases of low-value assets

A lease that has a lease term less than or equal to 12 months from commencement date or a lease of low-value assets is recognised as expenses on a straight-line basis over the lease term.

The Bank and subsidiaries as lessors

A lease that transfers substantially all the risks and rewards incidental to ownership of an underlying asset to a lessee is classified as finance leases. As at the commencement date, an asset held under a finance lease is recognised as a receivable at an amount equal to the net investment in the lease or the present value of the lease payments receivable and any unguaranteed residual value. Subsequently, finance income is recognised over the lease term to reflect a constant periodic rate of return on the net investment in the lease.

A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset to a lessee. Lease receivables from operating leases is recognised as income in profit or loss on a straight- line basis over the lease term. Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying assets and recognised as an expense over the lease term on the same basis as the lease income.

The preparation of financial statements in conformity with Thai Financial Reporting Standards at times requires management to make subjective judgements and estimates regarding matters that are inherently uncertain. These judgements and estimates affect reported amounts and disclosures; and actual results could differ from these estimates. Significant judgements and estimates are as follows:

In considering whether to recognise or to derecognise assets or liabilities, the management is required to make judgement on whether significant risk and rewards of those assets or liabilities have been transferred, based on their best knowledge of the current events and arrangements. 31 236

The Bank's management considers that the Bank has control over Krungthai Card Public Company Limited, although the Bank holds 49.29 percent of the shares and voting rights in such company, which is less than half. The Bank is the shareholder with a majority of votes and can dictate the important activities of the company and other shareholders are only minor shareholders. Therefore, Krungthai Card Public Company Limited is considered as a subsidiary of the Bank and must be included in the preparation of the consolidated financial statements from the date the Bank has control over such company.

The management is required to use judgement in estimation in determining the allowance for expected credit losses of loans to customers and accrued interest receivables, together with loan commitments and financial guarantee contracts. The calculation of allowance for expected credit losses of the Bank and its subsidiaries are based on the criteria of assessing if there has been a significant increase in credit risk, the development of complex expected credit losses model with a series of underlying assumptions, including the choice of inputs the forecasted macroeconomic variables in the model. This estimation has various relevant factors; therefore, the actual results may differ from estimates.

In determining the fair value of financial instruments that are not actively traded and for which quoted market prices are not readily available, the management exercise judgement, using a variety of valuation techniques and models. The input to these models is taken from observable markets, and includes consideration of credit risk of counterparty, liquidity, correlation and longer-term volatility of financial instruments. Changes in assumptions about these factors could affect the fair value and disclosures of fair value hierarchy.

The Bank and its subsidiaries assess allowance for impairment of properties for sale when net realisable value falls below the book value. The management uses the BOT’s regulation and judgement to estimate impairment losses, taking into consideration the latest appraisal value, the type and the nature of the assets.

32 Annual Report 2020 237

In determining depreciation of premises and equipment, the management is required to make estimates of the useful lives and salvage values of the premises and equipment, and to review these estimated useful lives and salvage values when there are any changes.

The Bank measures land at revalued amounts. Such amounts are determined by the independent appraisers, using the market approach. The valuation involves certain assumptions and estimates as described in Note 9.11 to the consolidated financial statements.

In addition, the Bank and its subsidiaries determine allowance for impairment of land, premises and equipment when the management assesses whether there are indicators of the impairment of land, premises and equipment, and record impairment losses when the recoverable amounts are lower than the carrying amounts. This requires management judgements in terms of forecasting future revenues and expenses relating to the assets subject to the review.

The Bank and its subsidiaries as lessees

Determining the lease term with extension and termination options

In determining the lease term, the management is required to exercise judgement in assessing whether the Bank and its subsidiaries are reasonably certain to exercise the option to extend or terminate the lease considering all relevant facts and circumstances that create an economic incentive for the Bank and its subsidiaries to exercise either the extension or termination option.

Estimating the incremental borrowing rate

The Bank and its subsidiaries cannot readily determine the interest rate implicit in the lease, therefore, the management is required to exercise judgement in estimating its incremental borrowing rate to discount lease liabilities. The incremental borrowing rate is the rate of interest that the Bank and its subsidiaries would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.

The Bank and its subsidiaries as lessors

In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to exercise judgement as to whether significant risk and rewards of ownership of the leased asset has been transferred, taking into consideration terms and conditions of the arrangement. 33 238

Deferred tax assets are recognised for deductible temporary differences and unused tax losses to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of estimated future taxable profits.

Obligations under the defined benefit plan are determined by using actuarial technique. Such determination is made based on various assumptions, including discount rate, future salary increase rate, staff turnover rate, and mortality rate, based on their best knowledge of current situation.

The Bank and its subsidiaries have contingent liabilities as a result of litigation and contingent liabilities as a result of transfer of business and transfer of non-performing assets. The management has used judgement to assess of the results of such transactions, and in case where they believe that there will be no losses, no provisions are recorded at the end of reporting date.

As described in Note 3.1 to the consolidated financial statements, during the current year, the Bank and its subsidiaries have adopted financial reporting standards related to financial instruments and TFRS 16. The cumulative effects of initially applying these financial reporting standards is recognised as an adjustment to retained earnings as at 1 January 2020. Therefore, the comparative information was not restated.

The changes in accounting policies due to the adoption of TFRS 16 does not impact to retained earnings as at 1 January 2020.

Amounts of the adjustment transactions that have an impact to the statement of financial position as at 1 January 2020, due to the changes in accounting policies by adopting these financial reporting standards, presented as follows:

34 Annual Report 2020 239

(Unit: Million Baht) Consolidated financial statements

The impacts of Financial reporting

standards related

31 December to financial 1 January 2019 instruments TFRS 16 2020

Statement of financial position

Assets Interbank and money market items - net 338,771 (400) - 338,371 Financial assets measured at fair value through profit or loss - 53,695 - 53,695 Claims on securities 67,350 (67,350) - - Derivative assets 55,811 1,663 - 57,474 Investments - net 395,228 (50,828) - 344,400 Investment in subsidiaries and associated companies - net 30,946 43 - 30,989

Loans to customers and accrued interest receivables - net 1,959,765 (4,030) - 1,955,735 Customers' liability under acceptances 133 (133) - - Right-of-use assets - - 3,895 3,895 Deferred tax assets 8,165 (730) - 7,435 Accrued income 3,487 (712) - 2,775 Other assets - net 23,842 5,822 - 29,664

Liabilities and equity Interbank and money market items 215,823 167 - 215,990 Liabilities to deliver securities 67,350 (67,350) - - Derivative liabilities 51,869 132 - 52,001 Debt issued and borrowings 96,841 216 - 97,057 Banks' liability under acceptances 133 (133) - - Lease liabilities - - 3,895 3,895 Provisions 15,240 1,514 - 16,754 Other liabilities 56,025 (756) - 55,269

Equity Other components of equity 33,006 2,230 - 35,236 Retained earnings 212,443 1,020 - 213,463

35 240

(Unit: Million Baht) Separate financial statements

The impacts of Financial reporting

standards related 31 December to financial 1 January 2019 instruments TFRS 16 2020

Statement of financial position

Assets Interbank and money market items - net 338,274 (400) - 337,874 Financial assets measured at fair value through profit or loss - 53,695 - 53,695 Claims on securities 67,350 (67,350) - - Derivative assets 55,811 1,663 - 57,474 Investments - net 395,174 (50,828) - 344,346 Loans to customers and accrued interest receivables - net 1,884,110 (4,030) - 1,880,080

Customers' liability under acceptances 133 (133) - - Right-of-use assets - - 3,434 3,434 Deferred tax assets 5,697 (730) - 4,967 Accrued income 3,193 (712) - 2,481 Other assets - net 23,555 5,576 - 29,131

Liabilities and equity Interbank and money market items 208,240 167 - 208,407 Liabilities to deliver securities 67,350 (67,350) - - Derivative liabilities 51,869 132 - 52,001 Debt issued and borrowings 51,323 216 - 51,539 Banks' liability under acceptances 133 (133) - - Lease liabilities - - 3,434 3,434 Provisions 13,776 1,514 - 15,290 Other liabilities 48,240 (756) - 47,484

Equity Other components of equity 16,095 2,101 - 18,196 Retained earnings 195,290 860 - 196,150

36 Annual Report 2020 241

Details of the impact on retained earnings as at 1 January 2020 due to the adoption of financial reporting standards related to financial instruments are presented as follows:

(Unit: Million Baht) Consolidated Separate financial statements financial statements

Recognition of losses from below-market interest rate loans - (246) Recognition of expected credit losses of financial assets - debt

instruments that are not measured at fair value through profit and loss (141) (141) Reclassification of available-for-sale equity investments to financial assets measured at fair value through profit and loss 35 35 Fair value measurement of investment in non-listed equity securities 104 104 Reclassification of available-for-sale debt securities investments to financial assets measured at fair value through profit or loss 98 98 Recognition of derivatives at fair value through profit and loss 1,607 1,607

Recognition of adjusted values due to fair value hedge, which included in hedged item’s book value (383) (383)

Recognition of the impact from the changes in accounting policy of associates (86) - Relevant deferred tax assets (214) (214)

The impact to retained earnings due to the adoption of financial reporting standards related to financial instruments 1,020 860

37 242

As at 1 January 2020, the classification and measurement of financial assets and financial liabilities in accordance with TFRS 9 comparing with the former classification and measurement are as follow:

(Unit: Million Baht)

Consolidated financial statements

Value

according to

former

accounting

policy The classification and measurement in accordance with TFRS 9

Investments in

Financial equity

Financial instruments securities

instruments measured at designated at

measured at fair value fair value Financial

fair value through other through other instruments

through profit comprehensive comprehensive measured at

or loss income income amortised cost Total

Financial assets as at 1 January 2020

Cash 68,434 - - - 68,434 68,434

Interbank and money market

items – net 338,771 - - - 338,371 338,371

Financial assets measured at fair

value through profit or loss - 53,695 - - - 53,695

Claims on securities 67,350 - - - - -

Derivatives assets 55,811 57,474 - - - 57,474

Investments - net 395,228 - 327,288 16,032 1,080 344,400

Loans to customers and accrued

interest receivables - net 1,959,765 - - - 1,955,735 1,955,735

Customers' liability under 133

acceptances - - - - -

Accrued income 3,487 - - - 2,775 2,775

Other assets - net 23,842 - - - 29,664 29,664

Total financial assets 2,912,821 111,169 327,288 16,032 2,396,059 2,850,548

Financial liabilities as at 1 January 2020

Deposits 2,155,865 - - - 2,155,865 2,155,865

Interbank and money market items 215,823 - - - 215,990 215,990

Liabilities payable on demand 4,744 - - - 4,744 4,744

Liabilities to deliver securities 67,350 - - - - -

Derivatives liabilities 51,869 52,001 - - - 52,001

Debt issued and borrowings 96,841 - - - 97,057 97,057

Banks' liability under acceptances 133 - - - - -

Provisions 15,240 - - - 16,754 16,754

Other liabilities 56,025 - - - 55,269 55,269

Total financial liabilities 2,663,890 52,001 - - 2,545,679 2,597,680

38 Annual Report 2020 243

(Unit: Million Baht)

Separate financial statements

Value

according to

former

accounting

policy The classification and measurement in accordance with TFRS 9

Investments in

Financial equity

Financial instruments securities

instruments measured at designated at

measured at fair value fair value Financial

fair value through other through other instruments

through profit comprehensive comprehensive measured at

or loss income income amortised cost Total

Financial assets as at 1 January 2020

Cash 68,362 - - - 68,362 68,362

Interbank and money market

items – net 338,274 - - - 337,874 337,874

Financial assets measured at fair

value through profit or loss - 53,695 - - - 53,695

Claims on securities 67,350 - - - - -

Derivatives assets 55,811 57,474 - - - 57,474

Investments - net 395,174 - 327,288 16,032 1,026 344,346

Loans to customers and accrued

interest receivables - net 1,884,110 - - - 1,880,080 1,880,080

Customers' liability under

acceptances 133 - - - - -

Accrued income 3,193 - - - 2,481 2,481

Other assets - net 23,555 - - - 29,131 29,131

Total financial assets 2,835,962 111,169 327,288 16,032 2,318,954 2,773,443

Financial liabilities as at 1 January 2020

Deposits 2,158,460 - - - 2,158,460 2,158,460

Interbank and money market items 208,240 - - - 208,407 208,407

Liabilities payable on demand 4,744 - - - 4,744 4,744

Liabilities to deliver securities 67,350 - - - - -

Derivatives liabilities 51,869 52,001 - - - 52,001

Debt issued and borrowings 51,323 - - - 51,539 51,539

Banks' liability under acceptances 133 - - - - -

Provisions 13,776 - - - 15,290 15,290

Other liabilities 48,240 - - - 47,484 47,484

Total financial liabilities 2,604,135 52,001 - - 2,485,924 2,537,925

39 244

The following table shows a reconciliation of the closing allowance for impairment as at 31 December 2019, recognised in accordance with BOT regulations and TAS 105 Accounting for Investments in Debt and Equity Securities and the provision for contingent liabilities, recognised in accordance with TAS 37 Provisions, Contingent Liabilities and Contingent Assets to the opening allowance for expected credit losses as at 1 January 2020, determined in accordance with TFRS 9. Such changes are due to remeasurement of allowance for expected credit losses under requirement of this financial reporting standard.

(Unit: Million Baht)

Consolidated financial statements

31 December 2019 Remeasurement 1 January 2020 Allowance for expected credit losses: Interbank and money market items - net (assets) 1,235 400 1,635 Held-to-maturity debt securities investments, which are reclassified to be measured at amortised cost 36 2 38

Investments in debt securities measured at fair value through other comprehensive income 79 20 99 Loans to customers and accrued interest receivables 135,268 (1,795) 133,473

Loan commitments and financial guarantee contracts 116 1,514 1,630

Total 136,734 141 136,875

(Unit: Million Baht)

Separate financial statements

31 December 2019 Remeasurement 1 January 2020 Allowance for expected credit losses: Interbank and money market items - net (assets) 1,235 400 1,635

Held-to-maturity debt securities investments, which are reclassified to be measured at amortised cost 36 2 38 Investments in debt securities measured at fair value

through other comprehensive income 79 20 99 Loans to customers and accrued interest receivables 126,772 (1,795) 124,977

Loan commitments and financial guarantee contracts 116 1,514 1,630

Total 128,238 141 128,379

40 Annual Report 2020 245

Upon initial application of TFRS 16 the Bank and its subsidiaries recognised lease liabilities that were previously classified as operating leases at the present value of the remaining lease payments, discounted using the Bank’ s and its subsidiaries’ incremental borrowing rate at 1January 2020 in percentage of 1.41 to 6.25 per annum (Separate financial statements: 1.41 to 3.14 percent per annum). For leases previously classified as finance leases, the Bank and its subsidiaries recognised the carrying amount of the right- of- use assets and lease liabilities based on the carrying amounts of the lease assets and lease liabilities immediately before the date of initial application of TFRS 16.

(Unit: Million Baht) Consolidated Separate financial statements financial statements

Operating lease commitments as at 31 December 2019 3,238 2,349

Less: Short-term leases and leases of low-value assets (243) (6) Add: Option to extend or terminate lease term 296 296 Less: Contracts reassessed as service agreements (101) -

Add: Lease agreements that are additionally determined 977 977 Less: Others (137) (86)

Less: Deferred interest expenses (135) (96)

Increase in lease liabilities due to TFRS 16 adoption 3,895 3,434 Liabilities under finance lease agreements as at 31 December 2019 - - Lease liabilities as at 1 January 2020 3,895 3,434

The adjustments of right- of- use assets due to TFRS 16 adoption as at 1 January 2020 are summarised below:

(Unit: Million Baht) Consolidated Separate financial statements financial statements

Building and building improvement 2,518 2,346 Furniture, fixtures and office equipment 231 - Motor vehicles 1,146 1,088

Total right-of-use assets 3,895 3,434

41 246

Credit Risk

Credit risk is the risk that a counterparty or a borrower fails to comply with conditions and covenants stated in the agreement or has the deterioration in assets' quality resulting in non-repayment full amount of debt per the agreement which was affect over the Bank's income and capital. The allowance for expected credit loss net under the assets on the statements of financial position, represented the Bank’s credit risk exposure.

The Bank concerns about the contingent credit risk at all time. The Bank also inputs economic and business from the research in loan portfolio management, including set the Industry Direction, stress testing and Industry Indicators in order to monitor and manage over all loan portfolio efficiently. The Bank continually evaluates and follows up both inside and outside country situation in order to assess the risk that may impact on solvency of the debtors and the Bank’s loan portfolio.

The Bank focuses on a credit expansion to both existing and new customers with high potentiality and high yield. The Bank highly concentrates on customer evaluation, business potential, ability to repay debt, and obvious objective of loan purpose. The Bank develops not only risk management tool to rank credit rating in order to be an element to estimate risk of large and middle size of loans, but also develops Credit Scoring tool in order to consider retail loan debtors including the Early Warning System that notices credit departments and set the loan policy guideline to prevent debtors becoming NPLs. Moreover, the Bank also has regularly improved credit risk management by reviewing/ revising credit policies and other policies related to the credit risk management for the purpose of complying with economic situation and the Bank’s business operation as well as being in consonant with risk management guidance prescribed by the BOT. The credit risk management policies and guidelines are reviewed/improved at least once a year in order to match with current situation.

The Bank manages credit risk management of the companies in financial business group under the supervision of BOT’ s regulations. The credit risk management policies and guidelines of those companies are also reviewed/ improved on a yearly basis and/ or when significantly changed event occurs and affects credit risk management.

The Bank monitors and reports risk management results of the Bank and its financial business group with the intention to control credit risk to be in compliance with the Bank's risk management plan, the BOT's supervision policy in credit risk and other regulators' rules. The risk management results reports are normally submitted to the Risk Oversight Committee on a monthly basis and reports to the Audit Committee and the Board of Directors on a quarterly basis.

42 Annual Report 2020 247

To follow up and manage the quality of credit, the Bank closely monitors the customers whose credits are approved in order to ensure that they are in comply with the terms and conditions of loan agreements by carrying out NPLs reduction project. The watch list debtors with weak performance will be monitored and controlled to prevent such loans becomes NPLs. However, in case those debtors become NPLs, the measure for debt restructuring shall be set up together with legal process. With this regards, the NPLs reduction project shall help stipulating the implementation plan to become clearer and more effective for the NPLs problem solving. Thus, the regular progress shall be reported regularly in order to expedite debt repayment with minimum loss.

In assessing the adequacy of provision as prescribed by the BOT, the Bank is required to examine the accuracy and completeness of loan classification, debt- restructuring and collateral data such as type and value of collateral. Such associated data potentially has significant impacts on the allowance for doubtful accounts of the Bank.

According to assets written- off, the Bank has policy to write off any assets classified as doubtful of loss with 100 percent provision; however, the Bank still closely follow up uncollectible amounts or taken legal proceedings to the final action.

The credit review is established to ensure the compliance with standard operation procedures in relation to credit approval and debt restructuring. In addition, the qualitative assessment for loan and other related assets are conducted for loan classification as prescribed by the BOT.

The maximum exposure to credit risk

The table below shows the maximum exposure to credit risk for recognised and unrecognised financial instruments. The maximum exposure is shown gross carrying amounts prior to both collateral consideration and any actions to increase assurance as:

• For financial assets recognised on the statement of financial position, the maximum exposure to credit risk equals their gross carrying amounts before deducting allowance for expected credit losses.

• For financial guarantees contracts, the maximum exposure to credit risk is the maximum amount that the Bank would have to pay when the guarantees are called upon.

• For loan commitments that are irrevocable over the life of the respective facilities, the maximum exposure to credit risk is the full amount of the committed facilities.

43 248

As at 31 December 2020, the maximum exposure to credit risk are as follow:

(Unit: Million Baht) Consolidated Separate financial statements financial statements

31 December 2020 31 December 2020

Interbank and money market items (assets) 519,529 519,058 Investments in debt securities measured at amortised cost 1,787 942 Investments in debt securities measured at fair value 300,505 301,259

through other comprehensive income Loans to customers and accrued interest receivables 2,351,041 2,267,679

Accrued interest receivables of non-loans to customers 1,038 1,038

Total financial assets 3,173,900 3,089,976

Loan commitments 1,320,320 1,320,320 Financial guarantee contracts 48,928 48,928

Total 1,369,248 1,369,248

Total maximum exposure to credit risk 4,543,148 4,459,224

The Bank determined that above disclosure will disclose from year 2020 onwards, due to the adoption of the financial reporting standard from 1 January 2020.

Credit quality analysis

Credit risk refers to the risk that a customer or a counterparty will not be able to comply its contractual obligations resulting in a financial loss to the Bank. The Bank has adopted the policy to prevent this risk by performing credit analysis from customers’ information and follow-up on customer status consistently.

The table below shows the credit quality of financial assets exposed to credit risk. The amounts presented for financial assets are gross carrying amount (before deducting allowance for expected credit losses). For loan commitments and financial guarantee contracts, the amounts in the table represent the amounts committed or guaranteed, respectively.

Explanation of 12- month expected credit losses, lifetime expected credit losses - not credit impaired, and lifetime expected credit losses-credit impaired are included in Note 4.10 to the consolidated financial statements.

44 Annual Report 2020 249

(Unit: Million Baht)

Consolidated financial statements

31 December 2020

Financial assets

where applied

Financial assets simplified

Financial assets where there has approach to

where there has been a calculated

not been a significant Financial assets expected credit

significant increase in credit that are credit- losses

increase in risk (Lifetime impaired (Lifetime ECL -

credit risk ECL - not credit (Lifetime ECL - simplified

(12-mth ECL) impaired) credit impaired) approach) Total

Interbank and money market items (assets)

Investment grade 39,946 53 - 25 40,024

Non-investment grade - 4,794 - - 4,794

Not yet due 473,633 1,078 - - 474,711

Total 513,579 5,925 - 25 519,529

Less Allowance for expected

credit losses (2,568) (169) - - (2,737)

Net book value 511,011 5,756 - 25 516,792

Investments in debt securities measured at amortised cost

Investment grade 1,401 - - - 1,401

Non-investment grade - 350 36 - 386

Total 1,401 350 36 - 1,787

Less Allowance for expected

credit losses (1) (10) (36) - (47)

Net book value 1,400 340 - - 1,740

Investments in debt securities measured at fair value through

other comprehensive income

Investment grade 300,505 - - - 300,505

Total 300,505 - - - 300,505

Allowance for expected credit

losses (42) - (926) - (968)

45 250

(Unit: Million Baht)

Consolidated financial statements

31 December 2020

Financial assets

where applied

Financial assets simplified

Financial assets where there has approach to

where there has been a calculated

not been a significant Financial assets expected credit

significant increase in credit that are credit- losses

increase in risk (Lifetime impaired (Lifetime ECL -

credit risk ECL - not credit (Lifetime ECL - simplified

(12-mth ECL) impaired) credit impaired) approach) Total

Loans to customers and accrued interest receivables - net

Not yet due 1,650,474 176,005 5,143 2,027 1,833,649

Overdue 1 - 30 days 362,312 17,387 1,268 385 381,352

Overdue 31 - 60 days 11 14,196 3,565 40 17,812

Overdue 61 - 90 days 22 15,058 523 19 15,622

More than 90 days 556 855 98,908 2,287 102,606

Total 2,013,375 223,501 109,407 4,758 2,351,041

Less Allowance for expected

credit losses (32,093) (41,627) (74,204) (2,604) (150,528)

Net book value 1,981,282 181,874 35,203 2,154 2,200,513

Loan commitments

Loan commitments 1,216,783 95,448 8,089 - 1,320,320

Less Allowance for expected

credit losses (910) (2,357) (858) - (4,125)

Net book value 1,215,873 93,091 7,231 - 1,316,195

Financial guarantee contracts

Financial guarantee contracts 43,942 4,822 164 - 48,928

Less Allowance for expected

credit losses (117) (334) (12) - (463)

Net book value 43,825 4,488 152 - 48,465

46 Annual Report 2020 251

(Unit: Million Baht)

Separate financial statements

31 December 2020

Financial assets Financial assets

where there has not where there has been

been a significant a significant increase Financial assets that

increase in in credit risk (Lifetime are credit-impaired

credit risk ECL - not credit (Lifetime ECL - credit

(12-mth ECL) impaired) impaired) Total

Interbank and money market items (assets)

Investment grade 39,500 53 - 39,553

Non-investment grade - 4,794 - 4,794

Not yet due 473,633 1,078 - 474,711

Total 513,133 5,925 - 519,058

Less Allowance for expected

credit losses (2,568) (169) - (2,737)

Net book value 510,565 5,756 - 516,321

Investments in debt securities measured at amortised cost

Investment grade 556 - - 556

Non-investment grade - 350 36 386

Total 556 350 36 942

Less Allowance for expected

credit losses (1) (10) (36) (47)

Net book value 555 340 - 895

Investments in debt securities measured at fair value through other

comprehensive income

Investment grade 301,259 - - 301,259

Total 301,259 - - 301,259

Allowance for expected credit

losses (42) - (926) (968)

47 252

(Unit: Million Baht)

Separate financial statements

31 December 2020

Financial assets Financial assets

where there has not where there has been

been a significant a significant increase Financial assets that

increase in in credit risk (Lifetime are credit-impaired

credit risk ECL - not credit (Lifetime ECL - credit

(12-mth ECL) impaired) impaired) Total

Loans to customers and accrued interest receivables - net

Not yet due 1,586,211 168,330 5,143 1,759,684

Overdue 1 - 30 days 361,232 15,976 1,268 378,476

Overdue 31 - 60 days - 13,384 3,565 16,949

Overdue 61 - 90 days - 14,741 523 15,264

More than 90 days - - 97,306 97,306

Total 1,947,443 212,431 107,805 2,267,679

Less Allowance for expected

credit losses (28,249) (39,183) (73,158) (140,590)

Net book value 1,919,194 173,248 34,647 2,127,089

Loan commitments

Loan commitments 1,216,783 95,448 8,089 1,320,320

Less Allowance for expected

credit losses (910) (2,357) (858) (4,125)

Net book value 1,215,873 93,091 7,231 1,316,195

Financial guarantee contracts

Financial guarantee contracts 43,942 4,822 164 48,928

Less Allowance for expected

credit losses (117) (334) (12) (463)

Net book value 43,825 4,488 152 48,465

48 Annual Report 2020 253

Collateral and any operations to increase creditability

The Bank has held collateral and any operations to increase creditability of exposure to credit risk. The details of the collateral held by the Bank for each type of financial assets are as follows:

(Unit: Million Baht)

Consolidated and separate financial statements

Exposure to credit risk with collateral Type of

31 December 2020 31 December 2019 major collateral

Interbank and money market items (assets) 449,876 258,707 Bonds

Loans to customers and accrued interest

receivables 1,589,418 1,505,396 Lands and buildings

Market Risk

Market risk is the risk that the Bank may be affected by changes in value of position on the statements of financial position which is caused by fluctuation of interest rate, foreign exchange rate, equity securities price and commodity price resulting in negative impact on income and capital. The Bank monitors and controls the market risk in the trading book and banking book portfolios by comparing the existing risks with the approved risk limits/indicators, setting proper guideline when there is the breach of the limits/indicators and reporting to the executives and the Risk Oversight Committee regularly.

- Interest Rate Risk

Interest rate risk is the risk that income or capital is adversely affected by changes in interest rates which affect the assets, liabilities and financial position that are rate sensitive items which may affect net interest income, economic value, market value of trading accounts and other income and expenses that relate to the interest rate.

As at 31 December 2020 and 2019, significant financial assets and liabilities of the Bank and subsidiaries classified by periods of interest rate change or period of maturity, whichever is earlier, are as follows:

49 254

(Unit: Million Baht)

Consolidated financial statements

31 December 2020

Non- Non-

At call to 1 - 3 3 - 12 Over interest performing

1 month months months 1 year bearing transaction Total

Financial assets Cash - - - - 68,161 - 68,161 Interbank and money market items 467,731 8,626 1,851 245 40,975 - 519,428

Investments 7,943 76,197 43,480 174,636 14,743 36 317,035

Loans to customers 1,414,740 301,386 427,590 61,114 22,644 107,368 2,334,842

Total financial assets 1,890,414 386,209 472,921 235,995 146,523 107,404 3,239,466

Financial liabilities Deposits 1,889,225 122,020 309,923 37,686 104,371 - 2,463,225

Interbank and money market items 179,848 43,441 6,983 38,194 6,100 - 274,566 Liabilities payable on demand - - - - 4,732 - 4,732

Debt issued and borrowings - 2,268 6,275 78,021 - - 86,564

Total financial liabilities 2,069,073 167,729 323,181 153,901 115,203 - 2,829,087

(Unit: Million Baht)

Consolidated financial statements

31 December 2019

Non- Non-

At call to 1 - 3 3 - 12 Over interest performing 1 month months months 1 year bearing transaction Total

Financial assets Cash - - - - 68,434 - 68,434

Interbank and money market items 289,469 8,155 3,563 1 38,640 4 339,832 Investments 11,745 128,578 62,618 178,132 15,360 36 396,469

Loans to customers 1,338,994 289,944 229,593 109,243 19,444 102,655 2,089,873

Total financial assets 1,640,208 426,677 295,774 287,376 141,878 102,695 2,894,608

Financial liabilities Deposits 1,569,871 121,186 246,914 133,958 83,936 - 2,155,865 Interbank and money market items 152,039 19,627 1,543 27,948 14,666 - 215,823 Liabilities payable on demand - - - - 4,744 - 4,744

Debt issued and borrowings 108 - 16,007 80,726 - - 96,841

Total financial liabilities 1,722,018 140,813 264,464 242,632 103,346 - 2,473,273

50 Annual Report 2020 255

(Unit: Million Baht)

Separate financial statements

31 December 2020

Non- Non-

At call to 1 - 3 3 - 12 Over interest performing

1 month months months 1 year bearing transaction Total

Financial assets Cash - - - - 68,116 - 68,116 Interbank and money market items 467,664 8,626 1,851 245 40,571 - 518,957

Investments 7,943 76,135 42,797 175,290 14,740 36 316,941

Loans to customers 1,425,332 233,886 425,923 58,690 4,937 103,254 2,252,022

Total financial assets 1,900,939 318,647 470,571 234,225 128,364 103,290 3,156,036

Financial liabilities Deposits 1,892,079 122,020 310,465 37,841 104,375 - 2,466,780

Interbank and money market items 173,706 43,441 6,983 38,194 6,101 - 268,425 Liabilities payable on demand - - - - 4,732 - 4,732

Debt issued and borrowings - - - 44,293 - - 44,293

Total financial liabilities 2,065,785 165,461 317,448 120,328 115,208 - 2,784,230

(Unit: Million Baht) Separate financial statements

31 December 2019

Non- Non-

At call to 1 -3 3 - 12 Over interest performing 1 month months months 1 year bearing transaction Total

Financial assets Cash - - - - 68,362 - 68,362 Interbank and money market items 288,902 8,155 3,224 1 39,049 4 339,335 Investments 11,745 127,962 62,529 178,783 15,360 36 396,415

Loans to customers 1,345,205 224,636 227,562 108,650 1,040 99,220 2,006,313

Total financial assets 1,645,852 360,753 293,315 287,434 123,811 99,260 2,810,425

Financial liabilities Deposits 1,571,307 121,187 247,084 134,113 84,769 - 2,158,460 Interbank and money market items 144,649 19,627 1,042 27,948 14,974 - 208,240 Liabilities payable on demand - - - - 4,744 - 4,744

Debt issued and borrowings 1 - 7,322 44,000 - - 51,323

Total financial liabilities 1,715,957 140,814 255,448 206,061 104,487 - 2,422,767

51 256

- Interest rate sensitivity analysis

Sensitivity analysis on interest rate change is to show the potential impact in the changes in interest rates on the statement of comprehensive income and the equity of the Bank by setting other variables constant.

The sensitivity of the statement of comprehensive income is the effect of changing interest rates on profit or loss for the year. For financial assets and financial liabilities at the end of reporting date, the Bank evaluates sensitivity analysis from net interest income change for the next 12 months under the assumption of changing interest rates of 1.00 percent for all types of financial assets and financial liabilities per each period of interest rate adjustment.

The impact of interest rates changes on profit or loss and equity as of 31 December 2020 can be summarised as follows:

(Unit: Million Baht) Consolidated Separate financial statements financial statements Effect of Effect of Profit or loss Equity Profit or loss Equity Interest increase 1% (94) (94) (370) (370) Interest decrease 1% (9,777) (9,777) (9,501) (9,501)

- Foreign Exchange Rate Risk

Foreign exchange rate risk is the risk that foreign exchange rate volatility gives the adverse impact on income or capital due to conducting transactions in foreign currency or having assets or liabilities in foreign currency, when converting foreign currency items on the Bank's financial statements to local currency, resulting in a decrease in book values including a decline in income or losses incurred from foreign currency trading.

The Bank has foreign exchange transactions, resulting in risk from changes in foreign exchange rates. However, the Bank has policy to hedge foreign exchange rate risk by regularly following up the risk and controlling the risk to be contained within the risk ceiling that the Bank set.

52 Annual Report 2020 257

Financial position of the Bank and its subsidiaries’ foreign currency balances as at 31 December 2020 and 2019 are as follows:

(Unit: Million Baht)

Consolidated financial statements

31 December 2020 Australian

US Dollar Euro Yen Dollar Others

Foreign currency in the statement of

financial position Cash 542 295 78 87 296 Interbank and money market items 13,674 1,112 552 147 3,882 Derivative assets 757,092 118,450 44,372 833 15,471 Investments 15,095 1,721 18,021 345 1,920

Loans to customers 55,581 474 242 11 114

Total assets 841,984 122,052 63,265 1,423 21,683 Deposits 32,682 1,684 96 229 2,909 Interbank and money market items 8,781 271 - - 58

Derivative liabilities 813,632 119,644 62,456 616 15,717

Total liabilities 855,095 121,599 62,552 845 18,684

Net (13,111) 453 713 578 2,999

Foreign currency of commitments Loan commitments 40,690 - - - 105 Liabilities under unmatured import bills 1,735 138 2 - 4 Letter of credit 22,302 2,654 1,670 - 2,417 Other commitments 15,728 3,043 29 - 209

53 258

(Unit: Million Baht)

Consolidated financial statements

31 December 2019

Foreign currency in the statement of Australian financial position US Dollar Euro Yen Dollar Others Cash 2,245 925 56 200 801 Interbank and money market items 21,138 1,406 2,562 129 3,360 Derivative assets 839,210 134,507 41,740 2,216 86,025 Investments 18,279 1,738 33,671 317 2,347

Loans to customers 55,892 747 291 19 42

Total assets 936,764 139,323 78,320 2,881 92,575 Deposits 21,041 1,614 31 261 3,083 Interbank and money market items 12,701 630 - - 160 Derivative liabilities 877,147 135,649 65,136 2,176 86,560

Debt issued and borrowings - - - - 7,322

Total liabilities 910,889 137,893 65,167 2,437 97,125

Net 25,875 1,430 13,153 444 (4,550)

Foreign currency of commitments Loan commitments (1) - - - - - Liabilities under unmatured import bills 1,012 38 113 - 19 Letter of credit 33,719 6,479 3,429 - 5,146 Other commitments 23,257 2,987 19 - 260

(1) The Bank determined that such disclosure will disclose from year 2020 onwards, due to the financial reporting standards, set of financial instruments, became effective on 1 January 2020.

54 Annual Report 2020 259

(Unit: Million Baht)

Separate financial statements

31 December 2020 Australian

US Dollar Euro Yen Dollar Others

Foreign currency in the statement of financial position Cash 542 295 78 87 296 Interbank and money market items 13,674 1,112 552 147 3,882

Derivative assets 757,092 118,450 44,372 833 15,471 Investments 15,095 1,721 18,021 345 1,920

Loans to customers 55,581 474 242 11 114

Total assets 841,984 122,052 63,265 1,423 21,683 Deposits 32,682 1,684 96 229 2,909 Interbank and money market items 8,781 271 - - 58

Derivative liabilities 813,632 119,644 62,456 616 15,717

Total liabilities 855,095 121,599 62,552 845 18,684

Net (13,111) 453 713 578 2,999

55 260

(Unit: Million Baht)

Separate financial statements

31 December 2019

Loans to customers 55,892 747 291 19 42

Total assets 936,764 139,323 78,320 2,881 92,575 Deposits 21,041 1,614 31 261 3,083 Interbank and money market items 12,701 630 - - 160 Derivative liabilities 877,147 135,649 65,136 2,176 86,560

Debt issued and borrowings - - - - 7,322

Total liabilities 910,889 137,893 65,167 2,437 97,125

Net 25,875 1,430 13,153 444 (4,550)

(1) The Bank determined that such disclosure will disclose from year 2020 onwards, due to the financial reporting standards, set of financial instruments, became effective on 1 January 2020.

- Foreign exchange rate sensitivity analysis

Sensitivity analysis will quantify the impact from the potential changes in exchange rates on the statement of comprehensive income and the equity of the Bank by setting constant to other variables. Risks and methods used in sensitivity analysis does not change from the previous period.

The impact from changes in exchange rate on profit or loss and equity as of 31 December 2020 can be summarised as follows:

(Unit: Million Baht)

Consolidated and separate financial statements

Effect of

Profit or loss Equity

10% increase (2,435) (836)

10% decrease 2,435 836 56 Annual Report 2020 261

- Commodity Price Risk

This is the risk that income or capital is adversely affected by changes in commodity price. The Bank has no policy of holding position in those items; hence, the Bank manage such risk exposures by doing back-to-back transactions.

Liquidity Risk

Liquidity risk is the risk that the Bank fails to repay liabilities or contingencies on due date because of inability to liquidate assets into cash or inability to finance sufficient funds or acquiring funds at a higher than acceptable level cost thus affecting income and capital funds at present and in the future.

Structure of Sources and Uses of Funds

Liquidity risk is the significant risk of commercial banks. The Bank's primary sources of funds are from deposits, mostly short-term deposit less than 1 year and deposits that can be withdrawn without restricted timing, i. e. saving accounts, current accounts. The Bank’s primary uses of funds are loans, which have maturity date longer than the deposits. Therefore, the Bank's liquidity risk stems from the inability to turn asset into cash or the ability to turn asset into cash at cost higher than acceptable level, which could affect to the Bank's income and capital at present and in the future.

Thus, the Bank has liquidity risk management process though variety of tools. The Bank also set the indicator to control liquidity risk such as coverage ratio (LCR) etc. In addition, the Bank also monitors the sources and uses of funds and funding source concentration, especially on important sources of funds; then regularly report such risk to the Asset and Liability Management Committee (ALCO), the Risk Oversight Committee (ROC) and other related parties.

Liquidity Risk Management Tools

Liquidity risk management tools are presented in several reports related to the Bank's liquidity and reported to top-level executives and relavant departments in order to efficiently manage liquidity risk. The Bank prepares liquidity risk report to evaluate liquidity risk on a daily and monthly basis by comparing with the approved risk limit/indicators in order to manage and control the risk level within the limit. Such reports are as follows;

- Net liquidity position report of the 14 days duration presents daily details by showing estimated cash inflow and outflow information adjusted according to customer behavior, which is based on historical cash flow pattern together with forecasted future trend under realistic and conservative principles. This report is done on a daily basis.

57 262

- Liquidity gap report presents estimates of future cash flows determined in accordance with the customer behavior in the past under normal situation.

- Daily financial position report presents the Bank’s liquid assets in terms of daily average deposits with the BOT. The BOT’ s regulation requires maintaining sum of the average daily deposit balance at BOT and the average daily cash balance at the cash inventory management center not less than 1 percent of total customers’ deposit and other specified borrowings. Moreover, the report demonstrates each type of high quality liquid assets to support the liquidity need for the Bank’s normal operations.

- Liquidity Coverage Ratio (LCR) Report is reported to the Risk Oversight Committee and the Assets and Liabilities Management Committee on a monthly basis in accordance with BOT’s regulations. LCR aimsto ensure that a bank has the sufficient liquidity to withstand the serve short term liquidity situation. The Bank mus have the unencumbered high quality liquid assets (HQLA) which consists of cash or assets that can be converted into cash at little or significant devaluation to meet its liquidity needs for a 30 calendar day under serve liquidity stress scenario.

- Net Stable Funding Ratio (NSFR) Report is reported to BOT on a quarterly basis and the Risk Oversight Committee and the Assets and Liabilities Management Committee on a monthly basis. NSFR is the liquidity risk measurement standard that aims to have stable funding source in line with the noncallable asset or the non-marketable with significant devaluation.

- Simulation liquidity risk stress testing report will be submitted to the Risk Oversight Committee on a quarterly basis.

Liquidity Risk Stress Testing

The Bank sets quarterly liquidity risk stress testing in conformity with the Bank's stress testing policy by using the 3 situations which are (1) Institution-specific crisis (2) Market-wide crisis and ( 3) Combination of both. Each situation is based on assumptions such as withdrawing customers' deposit type different proportion, declining in the market liquidity of assets, decreasing in ability to reach large- sized sources of funds. The Bank also prepares contingency plan to support crisis by considering to stress test result of each model situation. The contingency plan is set warning triggers of liquidity crisis in order that the Bank can reduce negative impact from liquidity problems that may occur with reasonable expenses/costs.

58 Annual Report 2020 263

The Bank also discloses information about Liquidity Coverage Ratio (LCR) in order to ensure that the Bank has sufficient manage liquidity to support liquidity stress situation under the BOT’ s notifications regarding the Disclosure of Liquidity Coverage Ratio Disclosure Standards.

Channel of disclosure www.krungthai.com>Investor Relations>Financial Information>LCR Disclosures

Date of disclosure Within 4 months after the end of reporting period.

Information as at 31 December 2020

Liquidity Ratio

The Bank has average fortnightly liquid assets not less than 1 percent of deposits and borrowings as prescribed by the BOT. As at 31 December 2020 and 2019, the Bank has deposits at the BOT and cash at the Cash Center of Baht 28,036 million and Baht 36,767 million, respectively.

Sources and Uses of Funds

Sources and uses of funds as at 31 December 2020, the Bank and its subsidiaries' major sources of funds were deposits accounting for 74.02 percent of total funds. Other significant sources of funds included interbank and money market items ( liabilities) of 8. 25 percent, debt issued and borrowings of 2.60 percent and equity of 10.67 percent.

The Bank and its subsidiaries' uses of funds were loans to customers accounting for 70.16 percent of total uses of funds. Other significant uses of funds included interbank and money market items - net (assets) of 15.53 percent and investments - net of 10.41 percent.

31 December 2020 31 December 2019

(%) (%)

Sources of Funds Deposits 74.02 71.57 Interbank and money market items (liabilities) 8.25 7.16 Debt issued and borrowings 2.60 3.21 Equity 10.67 11.56 Uses of Funds Loans to customers 70.16 69.38 Interbank and money market items - net (assets) 15.53 11.25 Investments - net 10.41 14.15

59 264

Loans to deposits ratio 31 December 2020 31 December 2019

(%) (%) Loans to deposits ratio (Consolidated financial statements) 94.79 96.94 Loans to deposits ratio (Separate financial statements) 91.29 92.95

On the consolidated financial statements as at 31 December 2020, the Bank has loans to deposits ratio of 94.79 percent which has decreased from 96.94 percent as at 31 December 2019.

Loans to deposits ratio on the separate financial statements as at 31 December 2020 is 91.29 percent which has decreased from 92.95 percent as at 31 December 2019. As a result, loans increased 12. 25 percent and deposits increased 14. 28 percent from the end of the year 2019.

These above ratios have no significant impact to the liquidities of the Bank and its subsidiaries.

As at 31 December 2020 and 2019, the Bank's significant financial assets and liabilities are classified by remaining maturity as follows:

(Unit: Million Baht) Consolidated financial statements

31 December 2020

Up to Over At call 1 years 1 - 5 years 5 years No maturity Total

Financial assets Cash - - - - 68,161 68,161 Interbank and money market items 41,775 477,651 2 - - 519,428 Financial assets measured at fair value through profit or loss - 959 1,329 10,262 1,174 13,724 Derivative assets - 29,447 28,197 16,863 - 74,507 Investments 36 51,869 224,627 25,760 14,743 317,035

Loans to customers 212,109 475,506 572,766 1,074,461 - 2,334,842

Total financial assets 253,920 1,035,432 826,921 1,127,346 84,078 3,327,697

Financial liabilities Deposits 1,930,454 513,786 18,985 - - 2,463,225

Interbank and money market items 55,545 180,826 31,408 6,787 - 274,566 Derivative liabilities - 25,358 25,581 14,532 - 65,471

Debt issued and borrowings - 8,543 14,559 63,462 - 86,564

Total financial liabilities 1,985,999 728,513 90,533 84,781 - 2,889,826

60 Annual Report 2020 265

(Unit: Million Baht)

Consolidated financial statements

31 December 2019

Up to Over At call 1 years 1 - 5 years 5 years No maturity Total

Financial assets Cash - - - - 68,434 68,434 Interbank and money market items 54,414 285,384 1 - 33 339,832 Derivative assets - 20,843 21,232 13,736 - 55,811

Investments 36 185,281 161,488 34,302 15,362 396,469

Loans to customers 221,297 527,111 377,770 963,695 - 2,089,873

Total financial assets 275,747 1,018,619 560,491 1,011,733 83,829 2,950,419

Financial liabilities Deposits 1,577,854 438,787 137,628 1,596 - 2,155,865

Interbank and money market items 45,907 141,442 21,922 6,552 - 215,823 Derivative liabilities - 21,485 16,841 13,543 - 51,869

Debt issued and borrowings - 6,186 19,088 71,567 - 96,841

Total financial liabilities 1,623,761 607,900 195,479 93,258 - 2,520,398

(Unit: Million Baht)

Separate financial statements

31 December 2020

Up to Over At call 1 years 1 - 5 years 5 years No maturity Total

Financial assets Cash - - - - 68,116 68,116 Interbank and money market items 41,304 477,651 2 - - 518,957 Financial assets measured at fair value through profit or loss - 1,102 1,650 10,262 1,174 14,188 Derivative assets - 29,447 28,197 16,863 - 74,507 Investments 36 51,124 225,283 25,758 14,740 316,941

Loans to customers 219,356 413,571 544,809 1,074,286 - 2,252,022

Total financial assets 260,696 972,895 799,941 1,127,169 84,030 3,244,731

Financial liabilities Deposits 1,933,312 514,328 19,140 - - 2,466,780 Interbank and money market items 52,403 177,827 31,408 6,787 - 268,425 Derivative liabilities - 25,358 25,581 14,532 - 65,471

Debt issued and borrowings - - - 44,293 - 44,293

Total financial liabilities 1,985,715 717,513 76,129 65,612 - 2,844,969

61 266

(Unit: Million Baht)

Separate financial statements

31 December 2019

Up to Over At call 1 years 1 - 5 years 5 years No maturity Total

Financial assets Cash - - - - 68,362 68,362 Interbank and money market items 54,012 285,322 1 - - 339,335 Derivative assets - 20,843 21,232 13,736 - 55,811

Investments 36 184,577 162,141 34,302 15,359 396,415

Loans to customers 222,110 464,363 356,133 963,707 - 2,006,313

Total financial assets 276,158 955,105 539,507 1,011,745 83,721 2,866,236

Financial liabilities Deposits 1,579,785 439,295 137,783 1,597 - 2,158,460

Interbank and money market items 43,820 135,946 21,922 6,552 - 208,240 Derivative liabilities - 21,485 16,841 13,543 - 51,869

Debt issued and borrowings - 1 - 51,322 - 51,323

Total financial liabilities 1,623,605 596,727 176,546 73,014 - 2,469,892

As at 31 December 2020 and 2019, the Bank has calculated capital funds in accordance with the BOT’s Basel III Framework. Since 2016, the BOT has required commercial banks that are registered in Thailand to maintain the additional common equity Tier 1 ratio that exceeds the minimum capital funds by more than 2.5 percent of total risk-weighted assets, by gradually increasing the excess over the minimum capital funds by 0.625 percent each year, beginning from 1 January 2016 until the full amount was maintained on 1 January 2019. The BOT added a rule requiring those commercial banks that have been identified as commercial banks with systematic country risk to maintain an additional capital adequacy ratio equal to 0.5 percent of risk-weighted assets from 1 January 2019 and increasing in to be 1 percent of total risk-weighted assets from 1 January 2020 onwards.

Capital adequacy ratios

2020 2019

More than % More than % Common equity Tier 1 ratio 8.00 7.50

Tier 1 capital fund ratio 9.50 9.00 Capital adequacy ratio 12.00 11.50

62 Annual Report 2020 267

The capital fund and capital adequacy ratio information as at 31 December 2020, is preliminary information prepared using the criteria and methods prescribed by the BOT, which requires the Bank to prepare and submit such information to the BOT within 3 months from the end of the quarter, and to disclose such information as at 31 December of each year via the Bank’s website. Comparative information as at 31 December 2020, already submitted to the BOT, is as follow: (Unit: Million Baht)

Financial business group

31 December 2020 31 December 2019

Common equity Tier 1 Paid-up share capital 72,005 72,005 Premium on share capital 20,834 20,834 Legal reserve 7,201 7,201 Net income after appropriation 205,207 193,994 Other components of equity 30,963 33,011 Capital deduction items on common equity Tier 1 (21,743) (22,340)

Tier 1 capital funds - financial instruments 1,288 1,100

Total Tier 1 capital funds 315,755 305,805 Tier 2 capital funds Long-term subordinated debt 44,000 53,091

Allowance for assets classified as normal 22,349 22,443

Total Tier 2 capital funds 66,349 75,534

Total capital funds 382,104 381,339 (Unit: Million Baht)

Separate financial statements

31 December 2020 31 December 2019 Common equity Tier 1 Paid-up share capital 72,005 72,005 Premium on share capital 20,834 20,834 Legal reserve 7,201 7,201 Net income after appropriation 187,929 179,309 Other components of equity 16,661 16,090

Capital deduction items on common equity Tier 1 (10,947) (9,977)

Total tier 1 capital funds 293,683 285,462 Tier 2 capital funds Long-term subordinated debt 44,000 53,091

Allowance for assets classified as normal 21,332 21,525

Total Tier 2 capital funds 65,332 74,616

Total capital funds 359,015 360,078 63 268

Capital adequacy ratio

Financial business group Separate financial statements 31 December 31 December 31 December 31 December

2020 2019 2020 2019 (%) (%) (%) (%) Common equity Tier 1 ratio 15.73 15.19 15.35 14.80 Tier 1 capital fund ratio 15.79 15.24 15.35 14.80 Capital adequacy ratio 19.11 19.01 18.76 18.66

The Bank discloses information about the capital requirements of the Bank and the financial business group in accordance with the BOT’s Notification regarding the Disclosure of Capital Requirements of Commercial Banks and Notification regarding the Disclosure of Capital Requirement of Financial Business Groups.

Channel of disclosure www. krungthai.com>Investor Relations>Financial Information> Pillar lll disclosures Date of disclosure Within Basel 4 months III Disclosures after the end of reporting period. GuidancesInformation as at 31 December 2020

9.1.1 Cash

Cash as at 31 December 2020 and 2019 are as follows:

(Unit: Million Baht)

Consolidated Separate financial statements financial statements

31 December 31 December 31 December 31 December 2020 2019 2020 2019

Cash 61,446 62,717 61,401 62,645 Cash received in advance from electronic money transactions and electronic money transfer services 6,715 5,717 6,715 5,717

Total 68,161 68,434 68,116 68,362

64 Annual Report 2020 269

9.1.2 Significant non-cash items for the years ended 31 December 2020 and 2019 are as follows: (Unit: Million Baht) Consolidated Separate

financial statements financial statements

31 December 31 December 31 December 31 December

2020 2019 2020 2019

Increase in revaluation surplus on available-for-sale investments - net of income tax expenses - 1,269 - 1,285

Increase in revaluation surplus on investments measured at fair value

through other comprehensive income - net of income tax expenses 923 - 741 - Increase in right-of-use assets 3,237 - 2,321 -

Increase in properties for sale from loans repayment 1,277 1,704 1,277 1,704

9.1.3 Disclosures of related changes in liabilities from financing activities

(Unit: Million Baht)

Consolidated financial statements Cash flows 31 December from financing 31 December Item 2019 activities Non-cash item 2020

Debt issued and borrowings 96,841 (10,569) 292 86,564

Total 96,841 (10,569) 292 86,564

(Unit: Million Baht)

Separate financial statements

Cash flows 31 December from financing 31 December Item 2019 activities Non-cash item 2020

Debt issued and borrowings 51,323 (7,322) 292 44,293

Total 51,323 (7,322) 292 44,293

65 270

(Unit: Million Baht)

Consolidated financial statements

31 December 2020

Financial Investments in

Financial instruments equity securities

instruments measured at designated at

measured at fair value fair value Financial

fair value through other through other instruments

through profit comprehensive comprehensive measured at

and loss income income amortised cost Total

Financial assets

Cash - - - 68,161 68,161

Interbank and money

market items - net - - - 516,792 516,792

Financial assets measured

at fair value through profit

and loss 13,724 - - - 13,724

Derivatives assets 74,507 - - - 74,507

Investments - net - 300,505 14,743 1,740 316,988

Loans to customers and

accrued interest

receivables - net - - - 2,200,513 2,200,513

Total financial assets 88,231 300,505 14,743 2,787,206 3,190,685

Financial liabilities Deposits - - - 2,463,225 2,463,225

Interbank and money

market items - net - - - 274,566 274,566

Liabilities payable on

demand - - - 4,732 4,732

Derivatives liabilities 65,471 - - - 65,471

Debt issued and

borrowings - - - 86,564 86,564

Lease liabilities - - - 4,504 4,504

Provisions - - - 20,287 20,287

Total financial liabilities 65,471 - - 2,853,878 2,919,349

The beginning balance of financial assets and financial liabilities classified in accordance with TFRS 9 are presented in Note 6.1 to the

consolidated financial statements.

66 Annual Report 2020 271

(Unit: Million Baht)

Separate financial statement

31 December 2020

Financial Investments in

Financial instruments equity securities

instruments measured at designated at

measured at fair value fair value Financial

fair value through other through other instruments

through profit comprehensive comprehensive measured at

and loss income income amortised cost Total

Financial assets

Cash - - - 68,116 68,116

Interbank and money

market items - net - - - 516,321 516,321

Financial assets measured

at fair value through profit

and loss 14,188 - - - 14,188

Derivatives assets 74,507 - - - 74,507

Investments - net - 301,259 14,740 895 316,894

Loans to customers and

accrued interest

receivables - net - - - 2,127,089 2,127,089

Total financial assets 88,695 301,259 14,740 2,712,421 3,117,115

Financial liabilities

Deposits - - - 2,466,780 2,466,780

Interbank and money

market items - net - - - 268,425 268,425

Liabilities payable on

demand - - - 4,732 4,732

Derivatives liabilities 65,471 - - - 65,471

Debt issued and

borrowings - - - 44,293 44,293

Lease liabilities - - - 3,529 3,529

Provisions - - - 18,740 18,740

Total financial liabilities 65,471 - - 2,806,499 2,871,970

The beginning balance of financial assets and financial liabilities classified in accordance with TFRS 9 are presented in Note 6.1 to the

consolidated financial statements.

67 272

(Unit: Million Baht)

Consolidated financial statements

31 December 2020 31 December 2019

At call Term Total At call Term Total

Domestic Bank of Thailand and Financial Institutions Development Fund 25,449 419,897 445,346 32,135 221,061 253,196 Commercial banks 459 8,449 8,908 475 22,532 23,007

Specialised financial institutions 14 19,573 19,587 23 6,126 6,149 Other financial institutions 25 26,249 26,274 40 28,993 29,033

Total 25,947 474,168 500,115 32,673 278,712 311,385

Add: Accrued interest receivables - 83 83 - 117 117 Less: Deferred revenue - (2) (2) - (22) (22) Less: Allowance for doubtful account - - - (1) (1,149) (1,150)

Less: Allowance for expected credit losses (1) (2,635) (2,636) - - -

Total domestic items 25,946 471,614 497,560 32,672 277,658 310,330

Foreign US Dollar 12,266 1,362 13,628 15,328 5,775 21,103 Yen 552 - 552 2,562 - 2,562 Euro 1,112 - 1,112 1,406 - 1,406 Others 1,898 2,125 4,023 2,224 1,176 3,400

Total 15,828 3,487 19,315 21,520 6,951 28,471

Add: Accrued interest receivables - 18 18 - 57 57 Less: Deferred revenue - - - - (2) (2)

Less: Allowance for doubtful account - - - (1) (84) (85) Less: Allowance for expected credit

losses (62) (39) (101) - - - Total foreign items 15,766 3,466 19,232 21,519 6,922 28,441

Total 41,712 475,080 516,792 54,191 284,580 338,771

68 Annual Report 2020 273

(Unit: Million Baht) Separate financial statements

31 December 2020 31 December 2019

At call Term Total At call Term Total

Domestic Bank of Thailand and Financial Institutions Development Fund 25,449 419,897 445,346 32,135 221,061 253,196 Commercial banks 2 8,449 8,451 1 22,532 22,533 Specialised financial institutions - 19,573 19,573 - 6,126 6,126

Other financial institutions 25 26,249 26,274 40 28,993 29,033

Total 25,476 474,168 499,644 32,176 278,712 310,888

Add: Accrued interest receivables - 83 83 - 117 117 Less: Deferred revenue - (2) (2) - (22) (22) Less: Allowance for doubtful account - - - (1) (1,149) (1,150) Less: Allowance for expected credit

losses (1) (2,635) (2,636) - - -

Total domestic items 25,475 471,614 497,089 32,175 277,658 309,833

Foreign US Dollar 12,266 1,362 13,628 15,328 5,775 21,103 Yen 552 - 552 2,562 - 2,562

Euro 1,112 - 1,112 1,406 - 1,406 Others 1,898 2,125 4,023 2,224 1,176 3,400

Total 15,828 3,487 19,315 21,520 6,951 28,471

Add: Accrued interest receivables - 18 18 - 57 57 Less: Deferred revenue - - - - (2) (2) Less: Allowance for doubtful account - - - (1) (84) (85)

Less: Allowance for expected credit

losses (62) (39) (101) - - - Total foreign items 15,766 3,466 19,232 21,519 6,922 28,441

Total 41,241 475,080 516,321 53,694 284,580 338,274

As at 31 December 2020, the Bank has no loans to a subsidiary company, which was a financial institution.

69 274

(Unit: Million Baht) Consolidated Separate

financial statements financial statements Investments 31 December 2020 31 December 2020

Financial assets held for trading Government and state enterprises securities 6,497 6,497 Private enterprises debt securities 1,973 2,437

Marketable equity securities 36 36

Total 8,506 8,970 Others Private enterprises debt securities 4,080 4,080 Unit trust 382 382

Marketable equity securities 756 756

Total 5,218 5,218 Total financial assets measured at fair value through profit and loss 13,724 14,188

9.5.1 Derivatives held for trading

Fair value and notional amount classified by type of risk are as follows.

(Unit: Million Baht) Consolidated financial statements

31 December 2020 31 December 2019

Fair value Notional Fair value Notional Type of risk Assets Liabilities amounts Assets Liabilities amounts

Foreign exchange rate 35,370 29,425 1,752,331 31,047 27,323 2,083,533 Interest rate 32,092 29,047 2,110,901 18,789 17,215 2,177,441

Others 6,125 6,699 123,954 5,975 7,331 163,262

Total 73,587 65,171 3,987,186 55,811 51,869 4,424,236

(Unit: Million Baht) Separate financial statements

31 December 2020 31 December 2019

Fair value Notional Fair value Notional Type of risk Assets Liabilities amounts Assets Liabilities amounts

Foreign exchange rate 35,370 29,425 1,752,331 31,047 27,323 2,083,533 Interest rate 32,092 29,047 2,110,901 18,789 17,215 2,177,469

Others 6,125 6,699 123,954 5,975 7,331 163,262

Total 73,587 65,171 3,987,186 55,811 51,869 4,424,264

70 Annual Report 2020 275

9.5.2 Derivative for hedging

As at 31 December 2020, hedging instrument classified by type of hedging and risk are detailed as follow.

Dynamic hedging

Fair value and notional amount classified by type of risk are as follows.

(Unit: Million Baht)

Consolidated and separate financial statements

31 December 2020

Notional Fair value Type of risk amounts Assets Liabilities

Interest rate risk Interest rate swap 4,315 - -

Total 4,315 - -

Fair value hedges

The amounts relating to items designated as hedged items under fair value hedges are as follow.

(Unit: Million Baht)

Consolidated and separate financial statements

31 December 2020 Accumulated amount of fair Carrying amount value adjustments on the

of hedged items hedged items

Type of risk Assets Liabilities Assets Liabilities

Interest rate risk THB fixed-rate borrowings A - 3,451 - 101

THB fixed-rate debt issued B - 10,293 - 293

Total interest rate risk - 13,744 - 394

Foreign exchange rate risk USD investments in equity securities, designated at fair value through other comprehensive income C 2,987 - 90 - EUR investments in equity securities, designated at fair value through other comprehensive income C 7 - - - Total foreign exchange rate risk 2,994 - 90 -

Total 2,994 13,744 90 394

71 276

The items in the statement of financial position, where the hedged items and the cumulative fair value changes are recorded, include:

A. Interbank and money market items (Liabilities) B. Debt issued and borrowings C. Investment - net

The amounts relating to items designated as hedging instruments under fair value hedges are as follow.

(Unit: Million Baht)

Consolidated and separate financial statements

31 December 2020 Fair value of

Notional hedging instruments

Type of risk amounts Assets Liabilities

Interest rate risk Interest rate swap 13,350 457 4

Total interest rate risk 13,350 457 4

Foreign exchange rate risk Foreign currency forward contract 30 - - Foreign currency swap contract 2,890 90 -

Total foreign exchange rate risk 2,920 90 -

Total 16,270 547 4

The below table sets out the outcome of the Bank’ s hedging strategy, set out in Note 4. 5 to the consolidated financial statements, in particular, to changes in the fair value of the hedged items and hedging instruments during the year, used as the basis for recognising ineffectiveness:

(Unit: Million Baht)

Consolidated and separate financial statements

For the year period 31 December 2020 Gains (losses) attributable to

Type of risk the hedged risk Change in fair value used Hedging Hedging for measuring Hedged items instruments Hedged items instruments ineffectiveness

Interest rate risk THB fixed-rate borrowings Interest rate swap 66 (62) 4 THB fixed-rate debt issued Interest rate swap (77) 77 -

Total interest rate risk (11) 15 4

72 Annual Report 2020 277

(Unit: Million Baht)

Consolidated and separate financial statements

For the year ended 31 December 2020 Gains (losses) attributable to

Type of risk the hedged risk Change in fair value used Hedging Hedging for measuring Hedged items instruments Hedged items instruments ineffectiveness

Foreign exchange rate risk USD investments in equity Foreign currency securities, designated at forward contract fair value through other / Foreign comprehensive income currency swap contract (88) 88 - EUR investments in equity Foreign currency securities, designated at swap contract fair value through other comprehensive income - - - Total foreign exchange rate risk (88) 88 -

Total (99) 103 4

Cash flow hedges

The amounts relating to items designated as hedged items under cash flow hedges are as follow.

(Unit: Million Baht)

Consolidated and separate financial statements

31 December 2020

Change in fair value Cash flow hedge reserve measuring used for Continuing Discontinued Type of risk ineffectiveness hedges hedges

Interest rate and foreign exchange rate risk Investment in debt securities, measured at fair value through other comprehensive income USD fixed-rate (3) (15) - USD floating rate (165) 50 - YEN fixed-rate (63) 123 - EUR fixed-rate 62 10 - EUR floating rate 59 14 - AUD fixed-rate 24 - -

Total (86) 182 -

The corresponding items in the statement of financial position, where the hedged items are recorded is “Investment - net”. 73 278

The below table sets out the outcome of the Bank’ s hedging strategy, set out in Note 4. 5 to the consolidated financial statements, in particular, the notional and the carrying amounts of the derivatives the Bank uses as cash flow hedging instruments and the changes in fair value used for measuring ineffectiveness of the cash flow hedges as follows:

(Unit: Million Baht)

Consolidated and separate financial statements

31 December 2020 Carrying amount of Changes in fair value used for measuring

hedging instruments ineffectiveness Amount Effective reclassified portion Ineffective from the recognised in portion cash flow other recognised hedge Notional comprehensive in profit or reserve to Type of risk amounts Assets Liabilities Total income loss profit or loss

Interest rate and foreign exchange rate risk Cross currency swap (THB:USD) - hedge the risk of USD fixed-rate investments in debt securities 1,410 11 6 3 3 - (14) Cross currency swap (THB:USD) - hedge the risk of USD floating rate investments in debt securities 5,052 173 - 165 165 - (115) Cross currency swap (THB:YEN) - hedge the risk of YEN fixed-rate investments in debt securities 14,906 189 134 63 63 - 45 Cross currency swap (THB:EUR) - hedge the risk of EUR fixed-rate investments in debt securities 797 - 63 (62) (62) - 67 Cross currency swap (THB:EUR) - hedge the risk of EUR floating rate investments in debt securities 922 - 61 (59) (59) - 74 Cross currency swap (THB:AUD) - hedge the risk of AUD fixed-rate investments in debt securities 343 - 32 (24) (24) - 27 Total 23,430 373 296 86 86 - 84

The corresponding line item in the statement of comprehensive income that includes hedge ineffectiveness is “Net gains on financial instruments measured at fair value through profit or loss”.

The corresponding line items in the statement of comprehensive income that affected by the reclassification of the cash flow hedge reserve are “ Net gains on financial instruments measured at fair value through profit or loss” and “Interest income”. 74 Annual Report 2020 279

As at 31 December 2020, the Bank has hedging instruments used to hedge interest rate risk and foreign exchange rate risk, classified by the maturity as follows.

Consolidated and separate financial statements

31 December 2020

Remaining time to maturity

Over 3 Over

Less than 1 to 3 months to 1 to 5 Over

Type of risk 1 month months 1 year years 5 years Total

Fair value hedges - interest rate risk

Interest rate swap - hedge THB fixed-rate

borrowings

Notional amount (Unit: Million Baht) 200 1,850 500 10,000 800 13,350

Average fixed rate (%) 4.60 4.34 4.50 3.40 3.41 3.59

Average floating rate (%) 0.72 0.39 0.63 1.70 0.83 1.41

Fair value hedges - foreign exchange rate risk

Foreign currency forward contract - hedge USD

investments in equity securities

Notional amount (Unit: Million Baht) - 30 - - - 30

Average foreign exchange rate (THB:USD) - 30.00 - - - 30.00

Foreign currency swap contract - hedge EUR

investments in equity securities

Notional amount (Unit: Million Baht) - 7 - - - 7

Average foreign exchange rate (THB:EUR) - 36.52 - - - 36.52

Foreign currency swap contract - hedge USD

investments in equity securities

Notional amount (Unit: Million Baht) - 2,884 - - - 2,884

Average foreign exchange rate (THB:USD) - 30.97 - - - 30.97

Cash flow hedges – interest rate and foreign exchange rate risk

Cross currency swap (THB:USD) - hedge the

risk of USD fixed-rate investments in debt

securities

Notional amount (Unit: Million Baht) - - 150 1,260 - 1,410

Average foreign exchange rate (THB:USD) - - 30.27 30.51 - 30.48

Average fixed rate (%) - - 2.10 2.70 - 2.64

Cross currency swap (THB:USD) - hedge the

risk of USD floating rate investments in debt

securities

Notional amount (Unit: Million Baht) - - 757 4,295 - 5,052

Average foreign exchange rate (THB:USD) - - 30.26 30.74 - 30.66

Average fixed rate (%) - - 1.48 1.48 - 1.48

75 280

Consolidated and separate financial statements

31 December 2020

Remaining time to maturity

Over 3 Over

Less than 1 to 3 months to 1 to 5 Over

Type of risk 1 month months 1 year years 5 years Total

Cross currency swap (THB:YEN) - hedge the

risk of YEN fixed-rate investments in debt

securities

Notional amount (Unit: Million Baht) - - 227 14,679 - 14,906

Average foreign exchange rate (THB:YEN) - - 0.28 0.29 - 0.29

Average fixed rate (%) - - 1.56 1.33 - 1.34

Cross currency swap (THB:EUR) - hedge the

risk of EUR fixed-rate investments in debt

securities

Notional amount (Unit: Million Baht) - - - 797 - 797

Average foreign exchange rate (THB:EUR) - - - 33.43 - 33.43

Average fixed rate (%) - - - 1.76 - 1.76

Cross currency swap (THB:EUR) - hedge the

risk of EUR floating rate investments in debt

securities

Notional amount (Unit: Million Baht) - - - 922 - 922

Average foreign exchange rate (THB:EUR) - - - 33.69 - 33.69

Average fixed rate (%) - - - 1.73 - 1.73

Cross currency swap (THB:AUD) - hedge the

risk of AUD fixed-rate investments in debt

securities

Notional amount (Unit: Million Baht) - - 344 - - 344

Average foreign exchange rate (THB:AUD) - - 20.79 - - 20.79

Average fixed rate (%) - - 1.50 - - 1.50

During the year ended 31 December 2020, there were no forecast transactions that are expected to be discontinued hedge as they were not expected to occur in the current year.

76 Annual Report 2020 281

The following table provides a reconciliation by risk categories of other components of equity, resulting from hedge accounting.

(Unit: Million Baht) Consolidated and separate financial statements

Gains (losses) Cash flow from deferred cost

hedge reserve of hedging Total

Balance as at 1 January 2020 - net income tax 9 (39) (30) Effective portion of changes in fair value: Interest rate and foreign exchange rate risk 86 - 86 Net amount reclassified to profit or loss:

Interest rate and foreign exchange rate risk 84 - 84 Changes in deferred cost of hedging - 90 90 Related income taxes (34) (18) (52)

Balance as at 31 December 2020 - net income tax 145 33 178

The detail of investments of the Bank and its subsidiaries as of 31 December 2020 and 2019 are as follows:

(Unit: Million Baht)

Consolidated Separate

financial statements financial statements

31 December 31 December 31 December 31 December

2020 2019 2020 2019

Investments in debt securities measured

at amortised cost 1,740 - 895 -

Investments in debt securities measured at fair

value through other comprehensive income 300,505 - 301,259 -

Investments in equity securities designated

at fair value through other comprehensive

income 14,743 - 14,740 -

Trading investments - 48,252 - 48,252

Available-for-sale investments - 344,198 - 344,856

Held-to-maturity investments - 1,737 - 1,028

General investments - 1,041 - 1,038

316,988 395,228 316,894 395,174

77 282

9.6.1 Investments in debt securities measured at amortised cost

(Unit: Million Baht)

Consolidated financial Separate financial statements statements

31 December 2020 31 December 2020

Amortised cost Amortised cost

Government and state enterprise securities 845 Private enterprise debt securities 364 364

Foreign debt securities 578 578 Total 1,787 942

Less Allowance for expected credit losses (47) (47)

Total 1,740 895

9.6.2 Investments in debt securities measured at fair value through other comprehensive income

(Unit: Million Baht)

Consolidated financial Separate financial statements statements

31 December 2020 31 December 2020

Fair value Fair value

Government and state enterprise securities 256,924 256,924 Private enterprise debt securities 10,867 11,621

Foreign debt securities 32,714 32,714

Total 300,505 301,259

Allowance for expected credit losses (968) (968)

9.6.3 Investments in equity securities designated at fair value through other comprehensive income

(Unit: Million Baht) Consolidated financial statements Separate financial statements

31 December 2020 31 December 2020

Fair value Dividend income Fair value Dividend income

Domestic marketable equity securities 10,436 281 10,436 281 Foreign marketable equity securities 3,180 27 3,180 27 Domestic non-marketable equity securities 1,120 14 1,117 14 Foreign non-marketable equity securities 7 1 7 1

Total 14,743 323 14,740 323

During the year ended 31 December 2020, the Bank and its subsidiaries have no disposal on investments in equity securities designated at fair value through other comprehensive income.

78 Annual Report 2020 283

9.6.4 Trading securities

(Unit: Million Baht)

Consolidated Separate

financial statements financial statements

31 December 2019 31 December 2019

Fair value Fair value

Government and state enterprise securities 29,737 29,737

Private enterprise debt securities 26 26

Foreign debt securities 18,489 18,489

Total 48,252 48,252

9.6.5 Available-for-sale securities

(Unit: Million Baht)

Consolidated Separate

financial statements financial statements

31 December 2019 31 December 2019

Fair value Fair value

Government and state enterprise securities 278,825 278,825

Private debt securities 15,730 16,388

Foreign debt securities 36,527 36,527

Domestic marketable equity securities 12,849 12,849

Foreign marketable equity securities 267 267

Total 344,198 344,856

9.6.6 Held-to-maturity debt securities

(Unit: Million Baht) Consolidated Separate

financial statements financial statements

31 December 2019 31 December 2019

Cost/Amortised cost Cost/Amortised cost Government and state enterprise securities 709 - Private debt securities 605 605

Foreign debt securities 459 459 Total 1,773 1,064

Less Allowance for impairment (36) (36)

Total 1,737 1,028

79 284

9.6.7 General investments

(Unit: Million Baht) Consolidated Separate

financial statements financial statements

31 December 2019 31 December 2019

Cost/Amortised cost Cost/Amortised cost Domestic non-marketable equity securities 2,242 2,239 Foreign non-marketable equity securities 3 3

Others 1 1 Total 2,246 2,243

Less Allowance for impairment (1,205) (1,205)

Total 1,041 1,038

9.6.8 The Bank and its subsidiaries have investments in securities which the Bank hold not less than 10 percent of the equity of the investee, classified by industrial sector and represented at their fair value as follows:

(Unit: Million Baht) Consolidated and

separate financial statements

31 December 2020 31 December 2019 Public utilities and services 1,726 1,538 Mutual funds and REIT 881 545

9.6.9 As at 31 December 2020 and 2019, investments of the Bank and its subsidiaries in the consolidated and separate financial statements include investments in companies which have problems with their financial position and operating performance, as follows:

Consolidated and separate financial statements

Allowance for expected

credit losses/ allowance

for impairment provided

Number Cost Fair value in the accounts

31 31 31 31 31 31 31 31 December December December December December December December December 2020 2019 2020 2019 2020 2019 2020 2019

Million Million Million Million Million Million

Baht Baht Baht Baht Baht Baht 1. Listed companies that are 2 3 - - 33 - - - possible to delisting from the SET 2. Companies which have debt 3 2 947 115 - - 962 115 settlement problems or

default on debt repayment

80 Annual Report 2020 285

9.7.1 Separate financial statements (Unit: Million Baht) Percentages of Investments Dividend for

shareholdings (Cost method) the years ended 31 31 31 31 31 31 Type of December December December December December December Name of company Type of business shares 2020 2019 2020 2019 2020 2019

Subsidiaries Directly held KTB Law Co., Ltd. Legal services Ordinary 100.00 100.00 30 30 13 27 KTB General Services and Security General services Ordinary 100.00 100.00 140 140 59 119 Co., Ltd. Krung Thai Asset Management Plc. Fund management Ordinary 100.00 100.00 211 211 500 455 KTB Computer Services Co., Ltd. IT services Ordinary 100.00 100.00 1,300 1,300 - 79 KTB Leasing Co., Ltd.* Hire purchase Ordinary 100.00 100.00 1,000 1,000 - - KTB Advisory Co., Ltd.** Financial Ordinary 76.00 100.00 228 40 - - counseling & advisory services Krungthai Card Plc. Credit card Ordinary 49.29 49.10 2,150 1,980 1,118 1,046 business KTC Nano Co., Ltd.*** Nano finance Ordinary 24.95 24.95 13 13 - - KTC Pico (Bangkok) Co., Ltd.*** Personal loan Ordinary 24.95 24.95 15 15 - - KTC Prepaid Co., Ltd.*** Electronic money Ordinary 24.95 - 25 - - - services Indirect held KTC Pico (Chonburi) Co., Ltd.**** Personal loan - - - - KTC Pico (Pathum Thani) Co., Ltd.**** Personal loan - - - - KTC Pico (Samut Prakan) Co., Ltd.**** Personal loan - - - - KTC Pico (Samut Sakhon) Co., Ltd.**** Personal loan - - - - Infinitas by Krungthai Co., Ltd.***** Digital platform services - - - - Total 5,112 4,729 1,690 1,726

Less Allowance for impairment (799) (799) - -

Total 4,313 3,930 1,690 1,726

81 286

(Unit: Million Baht)

Percentages of Investments Dividend for shareholdings (Cost method) the years ended 31 31 31 31 31 31 Type of Type of December December December December December December

Name of company business shares 2020 2019 2020 2019 2020 2019

Associated companies Krungthai-AXA Life Insurance Plc. Life insurance Ordinary 50.00 50.00 4,072 4,072 - - Krungthai Panich Insurance Plc. Non-life Ordinary 45.00 45.00 1,519 1,519 208 193 insurance

Krung Thai IBJ Leasing Co., Ltd. Hire purchase Ordinary 49.00 49.00 87 87 40 43 Krungthai Zmico Securities Co., Ltd. Securities Ordinary 50.00 50.00 1,069 1,069 - - business

National ITMX Co., Ltd. Services Ordinary 19.86 19.82 36 36 35 17

BCI (Thailand) Co., Ltd. Services Ordinary 22.17 22.17 117 117 - - Total 6,900 6,900 283 253

Less Allowance for impairment (10) - - -

Total 6,890 6,900 283 253

Investments in subsidiaries and associates - net 11,203 10,830 1,973 1,979

* Under considering of business restructuring plan.

** Under operation of business plan preparation.

*** The Bank has 24.95 percent shareholding in KTC Nano Co., Ltd.,KTC Pico (Bangkok) Co., Ltd. and KTC Prepaid Co., Ltd. and has indirect holdings

of 49.29 percent through Krungthai Card Plc., and which Krungthai Card Plc. held 75.05 percent in KTC Nano Co., Ltd., KTC Pico (Bangkok) Co., Ltd. and

KTC prepaid Co., Ltd.

**** The Bank, indirectly invested by KTC Pico ( Bangkok) Co., Ltd. , which invested in the 100% shareholdings of KTC Pico ( Chonburi) Co. , Ltd. , KTC

Pico (Pathum Thani) Co., Ltd., KTC Pico (Samut Prakan) Co., Ltd. and KTC Pico (Samut Sakhon) Co., Ltd.

***** The Bank, indirectly invested by KTB Advisory Co., Ltd., which invested in the 100% shareholdings of Infinitas by Krungthai Co., Ltd.

Details of investments in subsidiaries companies that have non-controlling interests

(Unit: Million Baht)

Other

Proportion of Accumulated comprehensive Share of surplus equity interest held by balance of Dividend paid to Profit allocated to income allocated to from the change in

non-controlling non-controlling non-controlling non-controlling non-controlling the ownership

Company’s name interests interests interests during the interests during the interests during the interests in 31 31 31 31 years ended years ended years ended subsidiaries

December December December December 31 December 31 December 31 December 31 December

2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 (%) (%)

Krungthai Card Plc. 50.71 50.90 11,561 10,039 1,150 1,069 2,699 2,853 14 (27) (41) -

KTB Advisory 12.17 - 37 ------37 - Co., Ltd.

11,598 10,039 1,150 1,069 2,699 2,853 14 (27) (4) -

82 Annual Report 2020 287

Summarised financial information, before eliminating intercompany transactions, of subsidiaries companies that have significant non-controlling interests are as follows:

(Unit: Million Baht)

Krungthai Card Plc.(1)

31 December 2020 31 December 2019

Summarised information about financial position Total assets 88,403 85,409

Total liabilities 65,553 65,674

Summarise information about comprehensive income Net operating income 19,146 19,502 Profit for the years 5,332 5,524 Other comprehensive income 27 (54) Total comprehensive income 5,359 5,471 Summarised information about cash flow Cash flow from (used in) operating activities 3,482 (2,211) Cash flow from (used in) investing activities (402) (487)

Cash flow from (used in) financing activities (2,515) 1,325

(1) Presents in the amount after adjustment for the effect of differences in accounting policies.

9.7.2 Consolidated financial statements

As at 31 December 2020 and 2019, investment in the associated companies, which presented under the equity method, in the consolidated financial statements consists of investment in ordinary shares of the following companies which operate in Thailand:

(Unit: Million Baht) 31 December 2020 31 December 2019

Investment Investment

Percentages of Investments (equity Percentages of Investments (equity Name of company shareholdings (cost method) method) shareholdings (cost method) method)

Associated companies Krungthai-AXA Life 50.00 594 23,816 50.00 594 25,663

Insurance Plc. Krungthai Panich 45.00 971 3,027 45.00 971 2,952

Insurance Plc.

Krung Thai IBJ Leasing 49.00 87 790 49.00 87 695 Co., Ltd.

Krungthai Zmico Securities 50.00 1,069 1,208 50.00 1,069 1,148

Co., Ltd. National ITMX Co., Ltd. 19.86 36 464 19.82 36 379

BCI (Thailand) Co., Ltd. 22.17 117 95 22.17 117 109

Total investments in associated companies - net 2,874 29,400 2,874 30,946

83 288

(Unit: Million Baht)

For the years ended 31 December

2020 2019

Share of other Share of other

Dividend Share of Retained comprehensive Dividend Share of comprehensive

Name of company income profit earnings income income profit income

Associated companies

Krungthai-AXA Life Insurance Plc. (1) - 1,436 (577) (2,706) - 963 12,799

Krungthai Panich Insurance Plc. (1) 208 315 (1) (76) 193 331 52 Krung Thai IBJ Leasing Co., Ltd. 40 135 - - 43 78 -

Krungthai Zmico Securities Co., Ltd. - 69 (29) 22 - 9 (28)

National ITMX Co., Ltd. 35 119 - - 17 53 -

BCI (Thailand) Co., Ltd. - (14) - - - (9) -

Total investments in associated

compaines – net 283 2,060 (607) (2,760) 253 1,425 12,823

(1) Presents in the amount after adjustment for the effect of differences in accounting policies for the year 2020.

Investments in associated companies are accounted in the consolidated financial statements by using the equity method based on financial information from unaudited/ unreviewed financial statements of the associated companies.

9.7.3 Significant financial information of the associated companies

Summarised information about financial position

(Unit: Million Baht)

Krungthai-AXA Life Insurance Plc. Krungthai Panich Insurance Plc. Krung Thai IBJ Leasing Co., Ltd.

31 December 31 December 31 December 31 December 31 December 31 December

2020 2019 2020 2019 2020 2019

Total assets 341,759 334,284 11,866 10,506 12,734 12,908

Total liabilities 294,127 282,958 5,139 3,946 11,121 11,490

Net assets 47,632 51,326 6,727 6,560 1,613 1,418

Shareholding percentage (%) 50.00 50.00 45.00 45.00 49.00 49.00

Carrying amounts of the associate

based on equity method 23,816 25,663 3,027 2,952 790 695

(Unit: Million Baht)

Krungthai Zmico Securities Co., Ltd. National ITMX Co., Ltd. BCI (Thailand) Co., Ltd. 31 December 31 December 31 December 31 December 31 December 31 December

2020 2019 2020 2019 2020 2019 Total assets 8,552 6,182 2,969 2,267 459 526 Total liabilities 6,136 3,886 634 348 29 36

Net assets 2,416 2,296 2,335 1,919 430 490 Shareholding percentage (%) 50.00 50.00 19.86 19.82 22.17 22.17 Carrying amounts of the associate based on equity method 1,208 1,148 464 379 95 109

84 Annual Report 2020 289

Summarised information about comprehensive income

(Unit: Million Baht)

For the years ended 31 December

Krungthai-AXA Life Insurance Plc. Krungthai Panich Insurance Plc. Krung Thai IBJ Leasing Co., Ltd.

2020 2019 2020 2019 2020 2019 Revenue 64,919 68,963 2,920 2,857 1,038 958

Profit (loss) 2,872 1,881 701 731 275 154

Other comprehensive income (5,411) 25,598 (168) 117 - -

Total comprehensive income (2,539) 27,479 533 848 275 154

(Unit: Million Baht)

For the years ended 31 December

Krungthai Zmico Securities Co., Ltd. National ITMX Co., Ltd. BCI (Thailand) Co., Ltd.

2020 2019 2020 2019 2020 2019 Revenue 1,368 1,098 1,389 1,049 32 67

Profit (loss) 138 13 595 372 (60) (40)

Other comprehensive income 43 (56) - - - - Total comprehensive income 181 (43) 595 372 (60) (40)

9.8.1 Classified by type of loans

(Unit: Million Baht)

Consolidated financial statements Separate financial statements 31 December 31 December 31 December 31 December

2020 2019 2020 2019 Overdrafts 155,037 168,673 155,037 168,673 Loans 1,592,453 1,407,818 1,504,951 1,324,106 Bills 581,389 505,162 590,829 512,322 Hire-purchase receivables 1,618 3,599 1 1

Finance lease receivables 957 1,165 - - Others 3,787 3,925 1,270 1,247 Less Deferred revenue (399) (469) (66) (36)

Total loans to customers net of deferred revenue 2,334,842 2,089,873 2,252,022 2,006,313

Add Accrued interest receivables 16,199 5,160 15,657 4,569 Total loans to customers net of deferred revenue, plus accrued interest receivables 2,351,041 2,095,033 2,267,679 2,010,882

85 290

(Unit: Million Baht)

Consolidated financial statements Separate financial statements 31 December 31 December 31 December 31 December

2020 2019 2020 2019 Less Allowance for doubtful accounts

1. Minimum reserve under BOT's regulations Individual approach - (66,723) - (64,394)

Collective approach - (4,046) - - 2. Excess allowance - (64,459) - (62,338) Less Revaluation allowance for debt restructuring - (40) - (40)

Less Allowance for expected credit losses (150,528) - (140,590) - Total loans to customers and accrued interest receivables - net 2,200,513 1,959,765 2,127,089 1,884,110

As at 31 December 2020, the Bank has interbank and money market loans made under programs rolled out in accordance with government policy. These consist of a soft loans program to provide working capital for SMEs, a soft loans program for replacement and improvement of machinery and increased productivity for SMEs, a program to provide financial support for entrepreneurs in the three Southern border provinces, a phase 6 of a program for financial institutions to provide revolving funds for energy conservation, a project to provide loans for the environment and COVID- 19 soft loans for personal loan and SMEs, together totalled Baht 44,667 million.

9.8.2 Classified by loans currency and residence (Unit: Million Baht) Consolidated financial statements

31 December 2020 31 December 2019

Domestic Foreign Total Domestic Foreign Total Baht 2,252,468 25,952 2,278,420 2,005,481 27,401 2,032,882 US Dollar 25,122 30,459 55,581 30,570 25,322 55,892 Other currencies 817 24 841 1,069 30 1,099

Total* 2,278,407 56,435 2,334,842 2,037,120 52,753 2,089,873

* Total loans net of deferred revenues

86 Annual Report 2020 291

(Unit: Million Baht)

Separate financial statements

31 December 2020 31 December 2019

Domestic Foreign Total Domestic Foreign Total Baht 2,169,648 25,952 2,195,600 1,921,921 27,401 1,949,322 US Dollar 25,122 30,459 55,581 30,570 25,322 55,892 Other currencies 817 24 841 1,069 30 1,099

Total* 2,195,587 56,435 2,252,022 1,953,560 52,753 2,006,313

* Total loans net of deferred revenues

9.8.3 Classified by business type of customers

(Unit: Million Baht)

Consolidated financial statements Separate financial statements

31 December 31 December 31 December 31 December

2020 2019 2020 2019

Agriculture and mining 24,424 26,521 24,267 26,389 Manufacturing and trading 504,670 533,198 503,167 532,322 Real estate and construction 128,957 114,047 128,112 113,021

Public utilities and services 583,746 360,854 584,481 361,774 Housing loans 430,281 396,036 430,281 396,036

Others 662,764 659,217 581,714 576,771

Total * 2,334,842 2,089,873 2,252,022 2,006,313

* Total loans net of deferred revenues

9.8.4 Classified by loans classification (Unit: Million Baht) Consolidated financial statements 31 December 2020 Loans to customers and accrued interest Allowance for expected receivables credit losses Financial assets where there has not been a significant increase in credit risk (Performing) 2,013,375 32,093 Financial assets where there has been a significant increase in credit risk (Under-Performing) 223,501 41,627 Financial assets that are credit-impaired (Non- Performing) 109,407 74,204 Financial assets where applied simplified approach to calculated expected credit losses (Lifetime ECL - simplified approach) 4,758 2,604 Total 2,351,041 150,528

87 292

(Unit: Million Baht)

Consolidated financial statements

31 December 2019 Net amount % Rate used in used in setting setting

Loans and the allowance allowance for Allowance for accrued interest for doubtful doubtful doubtful

receivables accounts (1) accounts (2) accounts

1. Minimum reserve under BOT's

regulations Normal 1,923,616 883,841 1 13,908

Special mention 68,696 30,545 2 8,478 Substandard 12,780 6,429 100 6,433 Doubtful 12,647 4,527 100 4,547 Doubtful of loss 77,294 37,398 100 37,403

2. Excess allowance 64,459

Total 2,095,033 962,740 135,228

(1) Net amount used in setting the allowance for doubtful accounts represents the outstanding amount of principal, excluding accrued interest receivables, after deducting collateral, or debts after deducting the present value of expected cash flows from debtors, or the present value of expected cash flows from the sale of collateral.

(2) Included loss rate net of recovery.

(Unit: Million Baht)

Separate financial statements

31 December 2020

Loans to customers and accrued interest Allowance for

receivables expected credit losses Financial assets where there has not been a significant increase in credit risk (Performing) 1,947,443 28,249 Financial assets where there has been a significant increase

in credit risk (Under-Performing) 212,431 39,183 Financial assets that are credit-impaired (Non-Performing) 107,805 73,158

Total 2,267,679 140,590

88 Annual Report 2020 293

(Unit: Million Baht)

Separate financial statements

31 December 2019 Net amount % Rate used in used in setting setting

Loans and the allowance allowance for Allowance for accrued interest for doubtful doubtful doubtful

receivables accounts (1) accounts (2) accounts 1. Minimum reserve under BOT's

regulations Normal 1,844,573 808,034 1 11,391 Special mention 67,026 29,098 2 7,942 Substandard 12,528 6,200 100 6,204 Doubtful 12,494 4,388 100 4,409 Doubtful of loss 74,261 34,444 100 34,448

2. Excess allowance 62,338

Total 2,010,882 882,164 126,732

(2) Included loss rate net of recovery.

9.8.5 As at 31 December 2020, the Bank and its subsidiaries have loans and accrued interest receivables with one delisted company amounting to Baht 8,410 million which have allowance for expected credit losses amounting to Baht 4,736 million (2019: There are loans and accrued interest receivable with 2 potential delisted companies amounting to Baht 8,501 million which have allowance for doubtful accounts of Baht 3,141 million).

89 294

9.8.6 Finance lease receivables (including hire-purchase receivables and finance lease receivables)

(Unit: Million Baht)

Consolidated financial statements

31 December 2020 31 December 2019

Amount due per the contract Amount due per the contract Not over Over 1 - Over Not over Over 1 - Over

1 year 5 years 5 years Total 1 year 5 years 5 years Total Gross investment of leases 1,100 1,290 185 2,575 2,532 2,169 63 4,764

Less Unearned financial income (333) (433) Present value of minimum lease payments 2,242 4,331 Less Allowance for doubtful accounts - (515) Less Allowance for expected credit losses (501) -

Finance lease receivables - net 1,741 3,816

(Unit: Million Baht)

Separate financial statements

31 December 2020 31 December 2019

Amount due of the contract Amount due of the contract Not over Over 1 - Over Not over Over 1 - Over

1 year 5 years 5 years Total 1 year 5 years 5 years Total Gross investment of leases 1 - - 1 1 - - 1 Less Unearned financial income - -

Present value of minimum leases payments 1 1 Less Allowance for doubtful accounts - (1) Less Allowance for expected credit losses (1) -

Finance lease receivables - net - -

90 Annual Report 2020 295

(Unit: Million Baht)

Consolidated financial statements

31 December 2020

Financial

Financial assets where assets where applied Financial there has simplified assets where been a approach to there has not significant Financial calculated been a increase in assets that expected significant credit risk are credit- credit losses increase in (Lifetime impaired (Lifetime credit risk ECL - not (Lifetime ECL - Allowance (12-mth credit ECL - credit simplified for doubtful

ECL) impaired) impaired) approach) accounts Total

Interbank and money market items (assets) Beginning balance - - - - 1,235 1,235 Changes due to the adoption of new accounting standards (1) 505 1,126 4 - (1,235) 400

505 1,126 4 - - 1,635 Changes due to staging of financial assets 5 (5) - - - -

Changes due to remeasurement of loss allowance 1,860 (962) - - - 898 New financial assets purchased or acquired 199 19 - - - 218 Derecognition of financial assets (1) (9) (4) - - (14)

Ending balance 2,568 169 - - - 2,737

Investments in debt securities measured at amortised cost Beginning balance - - - - 36 36 Changes due to the adoption of new accounting standards (1) 1 1 36 - (36) 2

1 1 36 - - 38 Changes due to remeasurement of loss allowance - 6 - - - 6 New financial assets purchased or acquired - 3 - - - 3 Ending balance 1 10 36 - - 47

91 296

(Unit: Million Baht) Consolidated financial statements 31 December 2020 Financial Financial assets where assets where applied Financial there has simplified assets where been a approach to there has not significant Financial calculated been a increase in assets that expected significant credit risk are credit- credit losses increase in (Lifetime impaired (Lifetime credit risk ECL - not (Lifetime ECL - Allowance (12-mth credit ECL - credit simplified for doubtful ECL) impaired) impaired) approach) accounts Total Investments in debt securities measured at fair value through other comprehensive income Beginning balance - - - - 79 79 Changes due to the adoption of new accounting standards (1) 12 8 79 - (79) 20 12 8 79 - - 99 Changes due to remeasurement of loss allowance 3 - 847 - - 850 New financial assets purchased or acquired 29 - - - - 29 Derecognition of financial assets (2) (8) - - - (10) Ending balance 42 - 926 - - 968

Loans to customers and accrued interest receivables Beginning balance - - - - 135,228 135,228 Changes due to the adoption of new accounting standards (1) 24,530 43,954 62,070 2,919 (135,228) (1,755) 24,530 43,954 62,070 2,919 - 133,473 Changes due to staging of financial assets 7,281 (9,030) 1,749 - - - Changes due to remeasurement of loss allowance (1,531) 7,268 34,391 (199) - 39,929 New financial assets purchased or acquired 3,962 1,081 1,362 - - 6,405 Derecognition of financial assets (1,910) (764) (1,258) - - (3,932) Bad debt written-off (239) (882) (24,110) (200) - (25,431) Bad debt recovery - - - 84 - 84 Ending balance 32,093 41,627 74,204 2,604 - 150,528

(1) Allowance for doubtful accounts at the beginning of the year is determined in accordance with the Bank of Thailand’ s regulations. Currently, they are shown as 12-mth ECL and Lifetime ECL according to the principles of TFRS 9, without retrospective adjustment, as described in Note 3 to the consolidated financial statements.

92 Annual Report 2020 297

(Unit: Million Baht)

Consolidated financial statements

31 December 2019 Allowance in excess of Special Doubtful of BOT’s

Normal mention Substandard Doubtful loss requirement Total Beginning balance 13,399 11,585 7,899 9,196 33,008 58,667 133,754 Doubtful accounts 648 (1,942) 3,285 (4,571) 21,181 5,239 23,840 Allowance for doubtful accounts transferred to allowance for debt restructuring revaluation - (40) - - - - (40) Bad debt recovery - - - - 2,320 - 2,320 Bad debt writen-off (144) (1,126) (4,751) (101) (19,054) - (25,176) Others 5 1 - 23 (52) 553 530

Ending balance 13,908 8,478 6,433 4,547 37,403 64,459 135,228

(Unit: Million Baht) Separate financial statements 31 December 2020 Financial assets where Financial there has assets where been a Financial there has not significant assets that been a increase in are credit- significant credit risk impaired increase in (Lifetime ECL (Lifetime ECL Allowance for credit risk - not credit - credit doubtful (12-mth ECL) impaired) impaired) accounts Total Interbank and money market items (assets) Beginning balance - - - 1,235 1,235 Changes due to the adoption of new accounting standards (1) 505 1,126 4 (1,235) 400 505 1,126 4 - 1,635 Changes due to staging of financial assets 5 (5) - - - Changes due to remeasurement of loss allowance 1,860 (962) - - 898 New financial assets purchased or acquired 199 19 - - 218 Derecognition of financial assets (1) (9) (4) - (14) Ending balance 2,568 169 - - 2,737

93 298

(Unit: Million Baht) Separate financial statements

31 December 2020

Financial assets where Financial there has assets where been a Financial there has not significant assets that been a increase in are credit- significant credit risk impaired increase in (Lifetime ECL (Lifetime ECL Allowance for credit risk - not credit - credit doubtful

(12-mth ECL) impaired) impaired) accounts Total Investments in debt securities measured at amortised cost Beginning balance - - - 36 36 Changes due to the adoption of new accounting standards (1) 1 1 36 (36) 2 1 1 36 - 38 Changes due to remeasurement of loss allowance - 6 - - 6 New financial assets purchased or acquired - 3 - - 3 Ending balance 1 10 36 - 47

Investments in debt securities measured at fair value through other comprehensive income Beginning balance - - - 79 79 Changes due to the adoption of new accounting standards (1) 12 8 79 (79) 20 12 8 79 - 99 Changes due to remeasurement of loss allowance 3 - 847 - 850 New financial assets purchased or acquired 29 - - - 29 Derecognition of financial assets (2) (8) - - (10)

Ending balance 42 - 926 - 968

94 Annual Report 2020 299

(Unit: Million Baht) Separate financial statements 31 December 2020 Financial assets where Financial there has assets where been a Financial there has not significant assets that been a increase in are credit- significant credit risk impaired increase in (Lifetime ECL (Lifetime ECL Allowance for credit risk - not credit - credit doubtful (12-mth ECL) impaired) impaired) accounts Total Loans to customers and accrued interest receivables Beginning balance - - - 126,732 126,732 Changes due to the adoption of new accounting standards (1) 22,204 41,956 60,817 (126,732) (1,755) 22,204 41,956 60,817 - 124,977 Changes due to staging of financial assets 6,449 (8,448) 1,999 - - Changes due to remeasurement of loss allowance (1,751) 5,740 28,695 - 32,684 New financial assets purchased or acquired 3,331 1,081 1,362 - 5,774 Derecognition of financial assets (1,745) (264) (525) - (2,534) Bad debt written-off (239) (882) (19,190) - (20,311) Ending balance 28,249 39,183 73,158 - 140,590

( 1) Allowance for doubtful accounts at the beginning of the year is determined in accordance with the Bank of Thailand’ s regulations. Currently, they are shown as 12-mth ECL and Lifetime ECL according to the principles of TFRS 9, without retrospective adjustment, as described in Note 3 to the consolidated financial statements. (Unit: Million Baht) Separate financial statements

31 December 2019 Allowance in excess of Special Doubtful of BOT’s Normal mention Substandard Doubtful loss requirement Total Beginning balance 11,143 11,091 7,689 9,020 30,109 56,288 125,340 Doubtful accounts 243 (3,110) (1,485) (4,634) 20,989 5,497 17,500 Allowance for doubtful accounts transferred to allowance for debt restructuring revaluation - (40) - - - - (40) Bad debt recovery - - - - 2,236 - 2,236 Bad debt written-off - - - - (18,834) - (18,834) Others 5 1 - 23 (52) 553 530 Ending balance 11,391 7,942 6,204 4,409 34,448 62,338 126,732

95 300

Properties for sale as of 31 December 2020 and 2019 are summarised as follows:

(Unit: Million Baht)

Consolidated financial statements

31 December 2020 31 December 2019 Beginning Ending Beginning Ending Type of properties for sale balance Increase Decrease balance balance Increase Decrease balance

Assets from debt repayment Immovable properties 40,136 4,381 (4,929) 39,588 36,799 8,018 (4,681) 40,136

Movable assets 192 131 (152) 171 297 41 (146) 192

Total 40,328 4,512 (5,081) 39,759 37,096 8,059 (4,827) 40,328

Others 69 974 (366) 677 69 - - 69

Properties for sale in transit 986 1,923 (2,259) 650 902 986 (902) 986

Total 41,383 7,409 (7,706) 41,086 38,067 9,045 (5,729) 41,383 Less Allowance for impairment (9,201) (1,575) 2,349 (8,427) (2,084) (7,117) - (9,201)

Properties for sale - net 32,182 5,834 (5,357) 32,659 35,983 1,928 (5,729) 32,182

(Unit: Million Baht)

Separate financial statements

31 December 2020 31 December 2019

Beginning Ending Beginning Ending Type of properties for sale balance Increase Decrease balance balance Increase Decrease balance

Assets from debt repayment Immovable properties 40,136 4,381 (4,929) 39,588 36,799 8,018 (4,681) 40,136 Movable assets 111 11 (111) 11 111 - - 111

Total 40,247 4,392 (5,040) 39,599 36,910 8,018 (4,681) 40,247 Others (closed branches) 69 968 (362) 675 69 - - 69

Properties for sale in transit 986 1,923 (2,259) 650 902 986 (902) 986

Total 41,302 7,283 (7,661) 40,924 37,881 9,004 (5,583) 41,302 Less Allowance for impairment (9,126) (1,541) 2,312 (8,355) (1,967) (7,159) - (9,126)

Properties for sale - net 32,176 5,742 (5,349) 32,569 35,914 1,845 (5,583) 32,176

During the years ended 31 December 2020 and 2019, the Bank had losses on sales of properties for sale totaling Baht 309 million and Baht 878 million, respectively ( excluding revenue from ownership transfer fees paid by customers totaling Baht 58 million and Baht 74 million, respectively and selling expenses of Baht 225 million and Baht 231 million, respectively).

96 Annual Report 2020 301

Immovable assets for sale classified by external and internal appraisers as at 31 December 2020 and 2019 consist of the following: (Unit: Million Baht) Consolidated and separate financial statements

31 December 2020 31 December 2019

Immovable assets for sale - assets from debt repayment Appraised by external appraisers 38,599 31,675 Appraised by internal appraisers 989 8,461

Total 39,588 40,136

Land, premises and equipment as of 31 December 2020 and 2019 are summarised as follows:

(Unit: Million Baht)

Consolidated financial statements

31 December 2020

Land

Cost Revaluation* Premises Equipment Others Total

Cost 1 January 2020 5,848 10,258 12,375 22,990 896 52,367 Additions/transfers-in 7 364 359 2,033 1,777 4,540 Disposals/transfers-out (77) (223) (118) (1,243) (1,697) (3,358)

31 December 2020 5,778 10,399 12,616 23,780 976 53,549 Accumulated depreciation

1 January 2020 - - 8,724 18,653 724 28,101 Depreciation - - 235 1,506 58 1,799

Disposals - - (109) (1,053) (16) (1,178)

31 December 2020 - - 8,850 19,106 766 28,722 Allowance for impairment

1 January 2020 49 - 16 - - 65

31 December 2020 49 - 16 - - 65 Net book value

31 December 2020 5,729 10,399 3,750 4,674 210 24,762

Depreciation for the years ended 31 December

2019 1,872

2020 1,799

* The Bank has revaluation in 2016. 97 302

(Unit: Million Baht)

Consolidated financial statements

31 December 2019

Land

Cost Revaluation* Premises Equipment Others Total

Cost 1 January 2019 9,522 10,438 12,272 20,676 1,354 54,262 Additions/transfers-in 3 - 300 2,783 630 3,716 Disposals/transfers-out (3,677) (180) (197) (469) (1,088) (5,611)

31 December 2019 5,848 10,258 12,375 22,990 896 52,367 Accumulated depreciation 1 January 2019 - - 8,642 17,531 653 26,826 Depreciation - - 255 1,543 74 1,872

Disposals - - (173) (421) (3) (597)

31 December 2019 - - 8,724 18,653 724 28,101 Allowance for impairment

1 January 2019 49 - 16 - - 65

31 December 2019 49 - 16 - - 65 Net book value

31 December 2019 5,799 10,258 3,635 4,337 172 24,201

* The Bank has revaluation in 2016.

98 Annual Report 2020 303

(Unit: Million Baht)

Separate financial statements

31 December 2020

Land

Cost Revaluation* Premises Equipment Others Total Cost 1 January 2020 6,065 10,258 11,455 12,837 873 41,488 Additions/transfers-in 3 - 49 891 1,725 2,668 Disposals/transfers-out (77) (223) (83) (216) (1,622) (2,221)

31 December 2020 5,991 10,035 11,421 13,512 976 41,935 Accumulated depreciation 1 January 2020 - - 8,028 10,377 724 19,129 Depreciation - - 200 892 58 1,150

Disposals - - (80) (212) (16) (308)

31 December 2020 - - 8,148 11,057 766 19,971 Allowance for impairment

1 January 2020 49 - 16 - - 65

31 December 2020 49 - 16 - - 65 Net book value

31 December 2020 5,942 10,035 3,257 2,455 210 21,899 Depreciation for the years ended 31 December

2019 1,110

2020 1,150

* The Bank has revaluation in 2016.

99 304

(Unit: Million Baht) Separate financial statements

31 December 2019

Land

Cost Revaluation* Premises Equipment Others Total Cost 1 January 2019 9,739 10,438 11,367 11,279 1,062 43,885 Additions/transfers-in 3 - 241 1,773 178 2,195 Disposals/transfers-out (3,677) (180) (153) (215) (367) (4,592)

31 December 2019 6,065 10,258 11,455 12,837 873 41,488

Accumulated depreciation 1 January 2019 - - 7,941 9,762 653 18,356 Depreciation - - 217 819 74 1,110

Disposals - - (130) (204) (3) (337)

31 December 2019 - - 8,028 10,377 724 19,129 Allowance for impairment

1 January 2019 49 - 16 - - 65

31 December 2019 49 - 16 - - 65 Net book value

31 December 2019 6,016 10,258 3,411 2,460 149 22,294

* The Bank has revaluation in 2016.

As at 31 December 2020 and 2019, the Bank and its subsidiaries have buildings and equipment which have been fully depreciated but are still in use, with gross carrying amounts before deducting accumulated depreciation and allowance for impairment approximately Baht 19,198 million and Baht 18,733 million, respectively ( separate financial statements: Baht 12,200 million and Baht 11,177 million, respectively).

The Bank arranged for an independent professional appraiser to appraise the value of land in 2016. The basis of the revaluation was market approach.

Assumptions used in the valuation are summarised below:

Consolidated and Result to fair value where separate financial as an increase in statements assumption value

Price per square wah (Baht) 2,800 - 1,566,352 Increase in fair value

100 Annual Report 2020 305

Surplus on revaluation of assets

Movements in surplus on revaluation of assets arising from revaluation of land of the Bank and its subsidiaries for the years ended 31 December 2020 and 2019 are summarised below: (Unit: Million Baht) Consolidated Separate financial statements financial statements

31 December 31 December 31 December 31 December 2020 2019 2020 2019

Balance - beginning of the year 8,206 8,350 8,206 8,350 Increased during the year (1) 418 - 127 -

Transfer out during the year (1) (44) (144) (44) (144)

Balance - end of the year 8,580 8,206 8,289 8,206

(1) Include the adjustment for the transfer of land of closed branches to properties for sale.

Surplus on revaluation of assets can neither be offset against deficit nor used for dividend distribution.

The Bank and its subsidiaries have lease contracts for various items of premises, equipment, and vehicles used in its operations. Leases generally have lease terms between 1 - 50 years.

9.12.1 Right-of-use assets

Movement of right-of-use assets for the year ended 31 December 2020 are shown below:

(Unit: Million Baht) Consolidated financial statements 31 December 2020 Premises Equipment Vehicles Total Cost 1 January 2020 (1) 2,518 231 1,146 3,895 Additions/transfers-in 2,478 339 420 3,237 Disposals/transfers-out (660) (125) (65) (850)

31 December 2020 4,336 445 1,501 6,282 Accumulated depreciation 1 January 2020 (1) - - - - Depreciation 1,657 130 447 2,234 Disposals (352) (30) (44) (426) 31 December 2020 1,305 100 403 1,808 Net book value

31 December 2020 3,031 345 1,098 4,474

(1) The beginning balance is presented in accordance with the adjustment of rights-of-use assets from the first-time adoption of TFRS16 as presented in Note 6.2 to the consolidated financial statements.

101 306

(Unit: Million Baht)

Separate financial statements

31 December 2020

Premises Equipment Vehicles Total Cost 1 January 2020 (1) 2,346 - 1,088 3,434 Additions/transfers-in 2,016 - 305 2,321 Disposals/transfers-out (657) - (56) (713)

31 December 2020 3,705 - 1,337 5,042 Accumulated depreciation 1 January 2020 (1) - - - - Depreciation 1,477 - 388 1,865

Disposals (352) - (42) (394)

31 December 2020 1,125 - 346 1,471 Net book value

31 December 2020 2,580 - 991 3,571

9.12.2 Lease liabilities

(Unit: Million Baht) Consolidated Separate financial statements financial statements

31 December 2020 31 December 2020

Lease payments Up to 1 years 2,078 1,592 Over 1 - 5 years 2,526 1,980 Over 5 years 63 63

Total 4,667 3,635 Less: Deferred interest expenses (163) (106)

Total 4,504 3,529

9.12.3 Expenses relating to leases that are recognised in profit or loss

(Unit: Million Baht) For the year ended 31 December 2020

Consolidated Separate financial statements financial statements

Depreciation expense of right-of-use assets 2,234 1,865 Interest expense on lease liabilities 101 60 Expense relating to short-term leases 442 382 Expense relating to leases of low-value assets 181 26

Total 2,958 2,333 102 Annual Report 2020 307

9.12.4 Others

The Bank and its subsidiaries had total cash outflows for leases for the year ended 31 December 2020 of Baht 3,027 million, including the cash outflow related to short- term lease, leases of low- value assets and variable lease payments that do not depend on an index or a rate. Moreover, the Bank and its subsidiaries had non-cash additions to right-of-use assets and lease liabilities of Baht 3,237 million

Intangible assets as of 31 December 2020 and 2019 are summarised as follows:

(Unit: Million Baht)

Consolidated financial statements

31 December 2020

Intangible

Computer Development assets under software Other licenses cost development Total

Cost 1 January 2020 7,225 14 4,286 468 11,993 Additions/transfers-in 2,829 - 42 2,644 5,515

Disposals/transfers-out (13) - (4) (2,418) (2,435)

31 December 2020 10,041 14 4,324 694 15,073 Accumulated amortisation 1 January 2020 4,742 11 3,340 - 8,093 Amortisation 764 1 228 - 993

Disposal (14) - (4) - (18)

31 December 2020 5,492 12 3,564 - 9,068 Net book value

31 December 2020 4,549 2 760 694 6,005

Amortisation for the years ended 31 December

2019 878

2020 993

103 308

(Unit: Million Baht)

Consolidated financial statements

31 December 2019

Intangible Computer Development assets under

software Other licenses cost development Total

Cost 1 January 2019 6,849 11 4,262 508 11,630 Additions/transfers-in 858 3 24 775 1,660

Disposals/transfers-out (482) - - (815) (1,297)

31 December 2019 7,225 14 4,286 468 11,993 Accumulated amortisation 1 January 2019 4,307 10 3,096 - 7,413 Amortisation 633 1 244 - 878

Disposal (198) - - - (198)

31 December 2019 4,742 11 3,340 - 8,093 Net book value

31 December 2019 2,483 3 946 468 3,900

(Unit: Million Baht) Separate financial statements

31 December 2020

Intangible Computer Development assets under software Other licenses cost development Total

Cost 1 January 2020 1,494 7 735 392 2,628 Additions/transfers-in 2,610 - 26 2,507 5,143

Disposals/transfers-out (11) - (4) (2,304) (2,319)

31 December 2020 4,093 7 757 595 5,452

Accumulated amortisation 1 January 2020 776 5 449 - 1,230 Amortisation 286 - 57 - 343

Disposal (12) - (3) - (15)

31 December 2020 1,050 5 503 - 1,558 Net book value

31 December 2020 3,043 2 254 595 3,894 Amortisation for the years ended 31 December

2019 182

2020 343

104 Annual Report 2020 309

(Unit: Million Baht)

Serperated financial statements

31 December 2019

Intangible Computer Development assets under

software Other licenses cost development Total

Cost

1 January 2019 1,173 5 735 130 2,043

Additions/transfers-in 606 2 - 615 1,223

Disposals/transfers-out (285) - - (353) (638)

31 December 2019 1,494 7 735 392 2,628

Accumulated amortisation

1 January 2019 650 5 393 - 1,048

Amortisation 126 - 56 - 182

31 December 2019 776 5 449 - 1,230

Net book value

31 December 2019 718 2 286 392 1,398

As at 31 December 2020 and 2019, the Bank and its subsidiaries have intangible assets which have been fully amortised but are still in use, with gross carrying amounts before deducting accumulated amortisation of approximately Baht 5,056 million and Baht 3,370 million, respectively (separate financial statements: Baht 886 million and Baht 304 million, respectively).

9.14.1 Deferred tax assets/liabilities

As at 31 December 2020 and 2019, deferred tax assets and liabilities are as follows:

(Unit: Million Baht)

Consolidated financial statements Separate financial statements

31 December 31 December 31 December 31 December

2020 2019 2020 2019 Deferred tax assets 11,567 13,117 8,931 10,387 Deferred tax liabilities (5,686) (4,953) (5,370) (4,690)

Net 5,881 8,164 3,561 5,697

105 310

The components of deferred tax assets and deferred tax liabilities are as follows:

(Unit: Million Baht)

Consolidated financial statements

Changes of deferred tax for

31 December 31 December the years ended 31 December

2020 2019 2020 2019

Deferred tax assets: Investments 585 426 159 (254)

Investment in subsidiaries and associated companies - 160 (160) (1) Loans to customers and accrued interest receivable 2,309 5,451 (3,142) 1,444 Properties for sale 1,671 1,825 (154) 1,423 Land, premises and equipment 16 18 (2) (251) Provisions 4,247 3,046 1,201 680 Unused tax losses 6 - 6 - Leases 88 - 88 -

Others 2,645 2,191 454 47

Total 11,567 13,117 (1,550) 3,088 Deferred tax liabilities: Investments (2,474) (2,161) (313) (127) Land, premises and equipment (2,444) (2,482) 38 10 Leases (79) - (79) -

Others (689) (310) (379) 66

Total (5,686) (4,953) (733) (51)

Net 5,881 8,164 (2,283) 3,037 Changes of deferred tax: Recognised in retained earning as of 1 January 2020 (1) (214) - Recognised in other components of equity

as of 1 January 2020 (1) (516) - Recognised in profit or loss (1,733) 3,120

Recognised in other comprehensive income 180 (83)

Total (2,283) 3,037

(1) The effect of changes in accounting policies due to the adoption of new financial reporting standards as described in Note 6

to the consolidated financial statements.

106 Annual Report 2020 311

(Unit: Million Baht)

Separate financial statements

Changes of deferred tax for

31 December 31 December the years ended 31 December

2020 2019 2020 2019

Deferred tax assets: Investments 583 426 157 (256) Investment in subsidiaries and associated companies 162 160 2 (1)

Loans to customers and accrued interest receivables 418 3,541 (3,123) 1,456 Properties for sale 1,671 1,825 (154) 1,432 Land, premises and equipment 13 13 - (174) Provisions 3,938 2,755 1,183 664

Others 2,146 1,667 479 24

Total 8,931 10,387 (1,456) 3,145 Deferred tax liabilities:

Investments (2,474) (2,163) (311) (129) Land, premises and equipment (2,388) (2,422) 34 15

Others (508) (105) (403) -

Total (5,370) (4,690) (680) (114)

Net 3,561 5,697 (2,136) 3,031 Changes of deferred tax: Recognised in retained earning as of 1 January 2020 (1) (214) - Recognised in other components of equity as of 1 January 2020 (1) (516) -

Recognised in profit or loss (1,650) 3,143

Recognised in other comprehensive income 244 (112)

Total (2,136) 3,031

(1) The effect of changes in accounting policies due to the adoption of new financial reporting standards as described in Note 6

to the consolidated financial statements.

107 312

9.14.2 Income tax

The Bank has complied with its tax management policy to correctly operate tax payment, tax filing and tax benefit utilisation according to the legal regulations.

The Bank has considered tax effects both current and future of benefit from carrying amount of assets or settlement of carrying amount of liabilities. If there is probable that the Bank will get benefits from carrying amount of assets or settlement of carrying amount of liabilities, the Bank will pay higher future income tax ( or lower) on the basis of amounts expected to be paid. Such the consideration is based on estimations, assumptions, regulation changes that may occur, legal interpretation and historical experience. In the future, if events change, which resulted in Bank to change its decision on the sufficiency of accrued income tax, any changes in accrued income tax will affect to income tax in the period that the changes occur.

Income tax expenses for the years ended 31 December 2020 and 2019 are as follows:

(Unit: Million Baht)

For the years ended 31 December Consolidated Separate

financial statements financial statements

2020 2019 2020 2019

Current income tax:

Current income tax charge 2,708 10,353 1,134 8,721

Deferred tax:

Relating to temporary differences and reversal of temporary differences 1,733 (3,120) 1,650 (3,143)

Income tax expenses reported in profit or loss 4,441 7,233 2,784 5,578

108 Annual Report 2020 313

The amounts of income tax relating to each component of other comprehensive income for the years ended 31 December 2020 and 2019 are as follows:

(Unit: Million Baht) For the years ended 31 December Consolidated Separate financial statements financial statements 2020 2019 2020 2019 Deferred tax on surplus from revaluation of assets 105 (36) 32 (36) Deferred tax on gains (losses) from hedge accounting 52 - 52 - Deferred tax on gains (losses) from the changes in value of investments in debt instruments measured at fair value through other comprehensive income 188 - 189 - Deferred tax on gains (losses) from the changes in value of investments in equity instruments designated at fair value through other comprehensive income (364) - (364) - Deferred tax relating to gains (losses) on changes in value of available-for-sale investments - 317 - 321 (161) (198) (153) (173) Deferred tax on actuarial gains and losses (180) 83 (244) 112

Reconciliations between income tax expenses and the product of accounting profit multiplied by the applicable tax rate for the years ended 31 December 2020 and 2019 are as follows:

(Unit: Million Baht)

For the years ended 31 December Consolidated Separate

financial statements financial statements

2020 2019 2020 2019

Accounting profit before tax 23,880 39,370 16,076 31,904 Applicable tax rate 20% 20% 20% 20% Accounting profit before tax multiplied by applicable tax rate 4,776 7,874 3,215 6,381 Effects of non-taxable revenue and non-deductible expenses - net (335) (641) (431) (803)

Income tax expenses reported in profit or loss 4,441 7,233 2,784 5,578

109 314

(Unit: Million Baht) Consolidated Separate

financial statements financial statements

31 December 31 December 31 December 31 December

2020 2019 2020 2019 Prepaid expenses 1,380 1,332 1,074 1,118 Suspense debtors 3,917 5,906 4,040 5,896 Collateral under Credit Support Annex

Contract and Cash Margin Debtors 16,490 6,975 16,490 6,975 Settlement account between the Bank and other financial institutions 627 968 627 968 Receivables from sale of securities 3,401 5,413 3,401 5,413

Other assets 9,066 6,421 9,038 6,341

Total 34,881 27,015 34,670 26,711 Less: Allowance for impairment (3,566) (3,173) (3,566) (3,156)

Other assets - net 31,315 23,842 31,104 23,555

As at 31 December 2020 and 2019, other assets included defaulted debtors from convertible preferred shares contracts of Baht 998 million and Baht 998 million, respectively, which the Bank has set up an allowance for impairment at the same amount ( Note 9. 42. 1 to the consolidated financial statements).

9.16.1 Classified by type of deposits

(Unit: Million Baht) Consolidated Separate

financial statements financial statements

31 December 31 December 31 December 31 December

2020 2019 2020 2019 Demand deposits 104,371 84,692 104,375 84,705 Saving deposits 1,826,080 1,493,162 1,828,935 1,495,080 Time of deposits 532,774 578,011 533,470 578,675

Total 2,463,225 2,155,865 2,466,780 2,158,460

110 Annual Report 2020 315

9.16.2 Classified by customers currency and residence

(Unit: Million Baht)

Consolidated financial statements

31 December 2020 31 December 2019

Domestic Foreign Total Domestic Foreign Total

Baht 2,409,212 16,413 2,425,625 2,112,824 17,011 2,129,835

US Dollar 19,991 12,691 32,682 14,217 6,824 21,041

Other currencies 2,661 2,257 4,918 2,621 2,368 4,989

Total 2,431,864 31,361 2,463,225 2,129,662 26,203 2,155,865

(Unit: Million Baht)

Separate financial statements

31 December 2020 31 December 2019

Domestic Foreign Total Domestic Foreign Total Baht 2,412,767 16,413 2,429,180 2,115,419 17,011 2,132,430 US Dollar 19,991 12,691 32,682 14,217 6,824 21,041 Other currencies 2,661 2,257 4,918 2,621 2,368 4,989

Total 2,435,419 31,361 2,466,780 2,132,257 26,203 2,158,460

(Unit: Million Baht)

Consolidated financial statements

31 December 2020 31 December 2019

At call Term Total At call Term Total

Domestic Bank of Thailand and Financial

Institutions Development Fund 261 13,538 13,799 598 24,156 24,754 Commercial banks 3,617 133,553 137,170 383 92,620 93,003 Specialised financial institutions 3,318 51,525 54,843 3,565 29,964 33,529

Other financial institutions 47,703 19,029 66,732 38,443 20,138 58,581

Total domestic items 54,899 217,645 272,544 42,989 166,878 209,867 Foreign US Dollar 384 1,376 1,760 289 5,428 5,717

Euro 106 - 106 79 - 79

Other currencies 156 - 156 160 - 160

Total foreign items 646 1,376 2,022 528 5,428 5,956

Total 55,545 219,021 274,566 43,517 172,306 215,823

111 316

(Unit: Million Baht)

Separate financial statements

31 December 2020 31 December 2019

At call Term Total At call Term Total

Domestic Bank of Thailand and Financial Institutions Development Fund 261 13,538 13,799 598 24,156 24,754 Commercial banks 475 130,554 131,029 686 86,633 87,319

Specialised financial institutions 3,318 51,525 54,843 3,565 29,964 33,529

Other financial institutions 47,703 19,029 66,732 38,443 18,239 56,682

Total domestic items 51,757 214,646 266,403 43,292 158,992 202,284

Foreign US Dollar 384 1,376 1,760 289 5,428 5,717 Euro 106 - 106 79 - 79 Other currencies 156 - 156 160 - 160

Total foreign items 646 1,376 2,022 528 5,428 5,956

Total 52,403 216,022 268,425 43,820 164,420 208,240

As at 31 December 2020 and 2019, debt issued and borrowings are classified as follows:

(Unit: Million Baht) Consolidated financial statements

Interest Maturity 31 December 2020 31 December 2019 Currency rate (%) date Domestic Foreign Total Domestic Foreign Total

Long term bonds 2015 Baht 3.68 - 4.00 2022 - 2025 2,695 - 2,695 4,695 - 4,695 2016 Baht 2.12 - 4.00 2021 - 2026 13,825 - 13,825 14,600 - 14,600 2017 Baht 2.46 - 3.80 2022 - 2027 10,988 - 10,988 11,043 - 11,043 2018 Baht 2.35 - 3.83 2021 - 2028 5,327 - 5,327 9,065 - 9,065 2019 Baht 2.40 - 3.20 2021 - 2029 5,974 - 5,974 6,115 - 6,115 2020 Baht 1.93 - 2.65 2022 - 2030 3,462 - 3,462 - - -

KTB subordinated debentures No.1/2015 MYR ------7,322 7,322 No.1/2017 Baht 3.40 2027 20,293 - 20,293 20,000 - 20,000 No.1/2019 Baht 3.70 2029 24,000 - 24,000 24,000 - 24,000 Other Short-term bills of exchange (B/E) * Baht - - - 1 - 1

Total 86,564 - 86,564 89,519 7,322 96,841

112 Annual Report 2020 317

(Unit: Million Baht) Separate financial statements

Interest Maturity 31 December 2020 31 December 2019 Currency rate (%) date Domestic Foreign Total Domestic Foreign Total

KTB subordinated debentures

No.1/2015 MYR ------7,322 7,322 No.1/2017 Baht 3.40 2027 20,293 - 20,293 20,000 - 20,000 No.1/2019 Baht 3.70 2029 24,000 - 24,000 24,000 - 24,000 Others Short-term bills of exchange (B/E) * Baht - - - 1 - 1

Total 44,293 - 44,293 44,001 7,322 51,323

* Include matured bills of exchange that its holder is still not redeemable.

Subordinated debentures pursuant to Malaysian Ringgit Medium Term Note Programme amounting to MYR 5,000 million

On 6 July 2015, the Bank issued and offered MYR 1,000 million of subordinated debentures pursuant to Basel III (Tier 2 subordinated debentures). The debenture has a tenor of 10 years and a fixed interest rate of 5. 10 percent per annum, and there is an option to early redeem the debentures after 5 years or after that subject to the conditions of the Bank, without the holder’s consent. The Bank redeemed the debentures on 6 July 2020.

Subordinated debentures

The Bank issued Baht 20,000 million of subordinated debenture No. 1/ 2017, comprising 20 million units of Baht 1,000 each. The debenture has a fixed interest rate of 3.40 percent per annum, with payment of interest to be made every three months until maturity, and a tenor of 10 years, maturing in 2027. There is an option to early redeem the debentures after 5 years, or after that subject to the conditions of the Bank, without the holder’s consent.

The Bank issued Baht 24,000 million of subordinated debenture No. 1/ 2019, comprising 24 million units of Baht 1,000 each. The debenture has a fixed interest rate of 3.70 percent per annum, with payment of interest to be made every three months until maturity, and a tenor of 10 years, maturing in 2029. There is an option to early redeem the debentures after 5 years, or after that subject to the conditions of the Bank, without the holder’s consent.

Redemption of subordinated debentures

There are rights to early redeem debentures after 5 years or on any scheduled interest payment date after 5 years, or in accordance with the conditions of the agreement.

113 318

(Unit: Million Baht) Consolidated Separate financial statements financial statements 31 December 31 December 31 December 31 December 2020 2019 2020 2019 Allowance for expected credit losses on loan commitments and financial guarantee contracts 4,588 - 4,588 - Provisions for employee benefits 15,123 14,419 13,582 12,973 Provisions for contingent losses from legal case 570 698 570 687 Other provisions 6 123 - 116 Total provisions 20,287 15,240 18,740 13,776

9.19.1 Allowance for expected credit losses on loan commitments and financial guarantee contracts

As at 31 December 2020, allowance for expected credit losses on loan commitments and financial guarantee contracts classified by classification are as follows:

(Unit: Million Baht)

Consolidated and separate financial statements

31 December 2020

Loan commitments Allowance for and financial expected credit guarantee contracts losses

Financial assets where there has not been a significant

increase in credit risk (Performing) 1,260,725 1,027

Financial assets where there has been a significant increase in credit risk (Under-Performing) 100,270 2,691 Financial assets that are credit-impaired (Non-Performing) 8,253 870

Total 1,369,248 4,588

114 Annual Report 2020 319

The changes in the allowance for expected credit losses on loan commitments and financial guarantees are as follows:

(Unit: Million Baht)

Consolidated and separate financial statements

31 December 2020

Financial Financial assets assets where where there has Financial there has not been a assets that

been a significant are credit- significant increase in credit impaired increase in risk (Lifetime (Lifetime ECL Allowance for credit risk (12- ECL - not credit - credit doubtful

mth ECL) impaired) impaired) accounts Total Beginning balance - - - 116 116 Changes due to the adoption of new accounting standards(1) 744 663 223 (116) 1,514 744 663 223 - 1,630 Changes due to staging of financial assets 192 (194) 2 - - Changes due to remeasurement of loss allowance 1 2,148 467 - 2,616

New issued obligations to grant credit/ guarantees 131 98 220 - 449 Derecognition of financial assets (41) (23) (2) - (66)

Bad debt written-off - (1) (40) - (41)

Ending balance 1,027 2,691 870 - 4,588

(1) Allowance for doubtful accounts at the beginning of the year is determined in accordance with the Bank of Thailand’ s regulation. Currently, they are shown as 12- mth ECL and Lifetime ECL according to the principles of TFRS 9, without retrospective adjustment, as described in Note 3 to the consolidated financial statements.

115 320

9.19.2 Provisions for employee benefits

(Unit: Million Baht) Consolidated Separate financial statements financial statements

31 December 31 December 31 December 31 December 2020 2019 2020 2019

Defined benefit obligation at the beginning of the years 14,419 10,988 12,973 9,904 Included in profit or loss:

Current service cost 918 742 786 643 Interest cost 266 393 241 351 Past service cost - 2,541 - 2,373 Included in other comprehensive income: Actuarial (gains) losses arising from: - Demographic assumptions changes 1 1,404 (1) 1,098 - Financial assumptions changes 375 2,011 399 1,844 - Experience adjustments 430 (2,426) 365 (2,076)

Benefits paid during the years (1,286) (1,234) (1,181) (1,164)

Defined benefit obligation at the end of the years 15,123 14,419 13,582 12,973

As at 31 December 2020 and 2019, the Bank and its subsidiaries expect to pay Baht 710 million and Baht 700 million, respectively, in long-term employee benefits during the next one year (separate financial statements: Baht 623 million and Baht 627 million, respectively).

The Principal Actuarial Assumptions

Consolidated Separate

financial statements financial statements 31 December 31 December 31 December 31 December 2020 2019 2020 2019

Discount rate (Percent per annum) 1.28 - 1.79 1.63 - 1.96 1.51 - 1.60 1.88 Future salary increase rate

(Percent per annum) 3.00 - 6.00 3.00 - 6.00 6.00 6.00 Average staff turnover rate

(Percent per annum) 0.57 - 34.38 0.57 - 45.84 0.57 - 6.88 0.57 - 6.88

Age of retirement (Year) 55 - 60 years 55 - 60 years 60 years 60 years

116 Annual Report 2020 321

Sensitivity Analysis of Principal Actuarial Assumptions

Defined benefit plan of the Bank and its subsidiaries are sensitive to changes in assumptions used for calculation. The actuarial assumptions may change based on changes in market conditions, changed in inflation condition, including demographic changes in the defined benefit plan. The following table shows the effect of changes in key assumptions. The changes in assumptions occur separately.

(Unit: Million Baht)

Increase (decrease) in the provisions

Consolidated Separate

financial statements financial statements

31 December 31 December 31 December 31 December

2020 2019 2020 2019

Discount rate

Increase 1% (1,548) (1,808) (1,400) (1,307)

Decrease 1% 1,854 2,191 1,682 1,563

Future salary increase rate

Increase 1% 1,301 1,689 1,153 1,084

Decrease 1% (1,118) (1,443) (988) (934)

As at 31 December 2020 and 2019, the weighted average durations of the liabilities for long-term employee benefit obligation of the Bank and its subsidiaries are 8 - 16 years and 8.5 - 17 years, respectively (separate financial statements: 12 - 16 years and 16 years, respectively). 9.19.3 Provisions for litigation

(Unit: Million Baht) Consolidated Separate

financial statements financial statements

31 December 31 December 31 December 31 December

2020 2019 2020 2019 Balance at the beginning of the years 698 685 687 685 Increase during the years 125 293 125 282 Utilised (222) (115) (222) (115)

Reversal of provisions (31) (165) (20) (165)

Balance at the end of the years 570 698 570 687

117 322

(Unit: Million Baht) Consolidated Separate

financial statements financial statements

31 December 31 December 31 December 31 December

2020 2019 2020 2019

Accrued interest expenses 3,554 4,611 3,227 4,269 Accrued expenses 11,515 13,958 10,448 12,020

Interbranch account 135 911 135 911 Suspense account creditors 4,597 2,151 3,508 3,110 Tax payables 2,059 5,713 1,191 4,863 Deferred revenue for reward points 2,346 2,277 - - Settle account between the Bank and other

financial institutions 993 132 531 132 Advanced account 6,805 5,717 6,715 5,717 Cheque in transit 5,939 1,745 5,939 1,745 Payables from trading securities 3,401 2,555 3,401 2,555

Other liabilities 12,023 16,255 10,946 12,918

Total 53,367 56,025 46,041 48,240

9.21.1 Ordinary shares

As at 31 December 2020 and 2019, the Bank’s authorised share capital and issued and paid- up share capital - ordinary shares was 13,976,061,250 shares.

9.21.2 Preferred shares

The 5.5 million of preferred shares are fully paid-up. Preferred share has more preference over the ordinary share. Apart from entitling to the same voting rights and claims on dividends as ordinary shares, it may enjoy preferential rights to a special dividend at a 3 percent fixed rate per annum prior to the ordinary shares when paid.

9.21.3 As at 31 December 2020, the Financial Institutions Development Fund holds 7,696,248,833 ordinary shares of the Bank or 55.05 percent of paid-up ordinary and preferred shares.

118 Annual Report 2020 323

(Unit: Million Baht) Consolidated Separate financial statements financial statements 31 December 31 December 31 December 31 December 2020 2019 2020 2019 Surplus on revaluation of assets 10,725 10,258 10,361 10,258 Less: The effect of deferred tax liabilities (2,145) (2,052) (2,072) (2,052) Net surplus on revaluation of assets 8,580 8,206 8,289 8,206 Revaluation surplus (deficit) on investments Debt securities 1,638 1,921 1,648 1,747 Equity securities 9,127 8,260 9,127 8,260 Expected credit loss 968 - 968 - Total revaluation surplus (deficit) on investments 11,733 10,181 11,743 10,007 Add (less): The effect of deferred tax liabilities (2,347) (2,001) (2,349) (2,001) Net revaluation surplus (deficit) on investments 9,386 8,180 9,394 8,006 Losses from reclassification of investments - (2) - (2) Hedge reserves 223 - 223 - Less: The effect of deferred tax liabilities (45) - (45) - Net hedge reserves 178 - 178 - Gains (losses) from translating the financial statements (72) (116) (72) (116) Share of other comprehensive income of associated companies 14,107 16,738 - -

Total 32,179 33,006 17,789 16,094

In accordance with the Public Limited Company Act, the Bank is required to appropriate to its legal reserve not less than 5 percent of its net profit after deducting accumulated losses brought forward (if any), until the legal reserve reaches an amount not less than 10 percent of authorised share capital. The Bank has already set aside the full amount of its legal reserve.

During the years ended 31 December 2020 and 2019, the Bank has dividends payments as follow: (Unit: Million Baht)

Total dividends Dividend per share Preferred Ordinary Preferred Ordinary Dividends Approved by shares shares shares shares Payment date

Interim dividends for Board of Directors the year 2019 Meeting on 25 March 2020 5 10,524 0.9075 0.753 23 April 2020 Dividends for the year 2018 Annual General Meeting of the Shareholders on 12 April 2019 5 10,035 0.8725 0.718 10 May 2019

119 324

9.25.1 Leases and service commitment

As at 31 December 2020, the Bank and its subsidiaries have future rental and service charges under non-cancellable leases which have not yet effective, long term lease and long term service contracts as follows :

(Unit: Million Baht) Consolidated Separate financial statements financial statements

Within Over Within Over 1 year 1 - 5 years 1 year 1 - 5 years

Non-cancellable lease which have not yet effective 1 1 - - Long term leases 137 8 3 2

Long term service contracts 888 604 249 195

Total 1,026 613 252 197

9.25.2 Contingent liabilities

(Unit: Million Baht) Consolidated Separate financial statements financial statements

31 December 31 December 31 December 31 December 2020 2019 2020 2019

Avals to bills 5,614 8,128 5,614 8,128 Guarantees of loans 9 3,544 9 3,544

Liabilities under unmatured import bills 5,450 6,589 5,450 6,589 Letters of credit 30,993 53,244 30,993 53,244 Banks' liability under acceptances 22 - 22 - Other contingencies Unused overdraft credit lines 180,307 153,649 180,307 153,649 Other guarantees 177,681 180,861 177,681 180,861

Others 180,768 6,417 6,525 6,417

Total 580,844 412,432 406,601 412,432

120 Annual Report 2020 325

As at 31 December 2020 and 2019, the Bank has contingent liabilities relating to significant lawsuits brought against the Bank of Baht 17,311 million and Baht 13,349 million, respectively. These included lawsuits in which the Court of First Instance has already ruled and that are being appealed in the Appeal Court and the Supreme Court.

As at 31 December 2020 and 2019, the Bank has guarantees for transactions of the Bank of Baht 5,140 million and Baht 5,161 million, respectively.

(Unit: Million Baht)

Consolidated and separate financial statements

31 December 2020 31 December 2019

Government and state enterprise bonds pledged as collateral Court collateral 447 518 Repurchase agreements 40,133 26,212 Collateral for Student Loan Fund 58 58 Properties for sale (subject to purchase or sell agreements with

clients) 1,808 2,037 Properties for sale (debtor is granted the right to buy back or first right for this portion) 6,236 8,405

Total 48,682 37,230

9.27.1 The Bank have the following related parties transactions with the Bank’s executives (First Vice President and above) including related persons who together with these employees as follows:

(Unit: Million Baht)

Separate financial statements

31 December 2020 31 December 2019

Loans 163 130 Deposits 375 232

(Unit: Million Baht)

Separate financial statements

For the years ended 31 December

2020 2019

Interest income 5 5

Interest expenses 2 2 121 326

9.27.2 Interbank and money market items (assets), loans, obligations, derivatives, and other assets

The balances of interbank and money market items (assets), loans, obligations, derivatives, and other assets with related parties, which are under normal bank pricing policies, as at 31 December 2020 and 2019 are as follows:

(Unit: Million Baht)

Consolidated Separate financial statements financial statements

31 December 31 December 31 December 31 December 2020 2019 2020 2019

Interbank and money market items (assets) Associated companies Krungthai-AXA Life insurance Plc. 1 - 1 -

Krungthai Zmico Securities Co., Ltd. 431 605 431 605 Less Allowance for doubtful accounts - (6) - (6)

Less Allowance for expected credit losses (62) - (62) -

Total 370 599 370 599

Loans Related parties in which the Bank held from 10 to 20 percent of paid-up capital in total - 1 - 1 Related parties in which the Bank acquired 10 percent or more of paid-up capital from TDR 8,411 8,490 8,411 8,490

Less Allowance for doubtful accounts - (3,141) - (3,141)

Less Allowance for expected credit losses (4,736) - (4,736) -

Total 3,675 5,350 3,675 5,350

Subsidiaries

KTB General Services and Security Co., Ltd. - - 7 8

KTB Computer Services Co., Ltd. - - 2,096 2,089

KTB Leasing Co., Ltd. - - 1,780 3,693

Krungthai Card Plc. - - 7,660 3,491

Less Allowance for doubtful accounts - - - (93)

Less Allowance for expected credit losses - - (21) -

Total - - 11,522 9,188

Associated companies

Krung Thai IBJ Leasing Co., Ltd. 5,142 5,739 5,142 5,739

Krungthai Panich Insurance Plc. - 1 - 1

Less Allowance for doubtful account - (57) - (57)

Less Allowance for expected credit losses (26) - (26) -

Total 5,116 5,683 5,116 5,683

122 Annual Report 2020 327

(Unit: Million Baht)

Consolidated Separate

financial statements financial statements

31 December 31 December 31 December 31 December

2020 2019 2020 2019

Loans (cont’d)

Related parties with common directors or key

management personnel 19,263 30,620 19,263 30,620

Less Allowance for doubtful accounts - (170) - (170)

Less Allowance for expected credit losses (126) - (126) -

Total 19,137 30,450 19,137 30,450

Commitments

Related parties in which the Bank holds from 10

to 20 percent of paid-up capital in total 13 19 13 19

Related parties in which the Bank acquired 10

percent or more of paid-up capital from TDR 1 1 1 1

Subsidiaries

KTB General Services and Security Co., Ltd. - - 21 1

KTB Computer Services Co., Ltd. - - 5 5

KTB Leasing Co., Ltd. - - 1 1

Krungthai Card Plc. - - 1 1

Associated companies

Krung Thai IBJ Leasing Co., Ltd. 2 2 2 2

Krungthai-AXA Life Insurance Plc. 1 1 1 1

Krungthai Panich Insurance Plc. 5 5 5 5

Related parties with directors or key

management personnel 365 127 365 127

Derivatives (Notional amount)

Subsidiary

KTB Leasing Co., Ltd. - - - 28

Associated companies

Krung Thai IBJ Leasing Co., Ltd. 731 933 731 933

Krungthai-AXA Life Insurance Plc. 10,614 9,690 10,614 9,690

123 328

(Unit: Million Baht)

Consolidated Separate financial statements financial statements

31 December 31 December 31 December 31 December 2020 2019 2020 2019

Other assets Entities with related parents or with related directors or key management personnel 2,511 1,531 2,511 1,531 Subsidiaries

KTB Law Co., Ltd. - - 18 - KTB Leasing Co., Ltd. - - 1 - Krungthai Card Plc. - - 752 903 Krung Thai Asset Management Plc. - - 108 55

Associated companies Krungthai-AXA Life Insurance Plc. 169 250 168 250 Krungthai Panich Insurance Plc. 29 32 29 32 Krungthai Zmico Securities Co., Ltd. - 1 - 1

9.27.3 Deposits, interbank and money market items (liabilities) and other liabilities

The balances of deposits, interbank and money market items (liabilities) and other liabilities to related parties, which are under normal bank pricing policies, as at 31 December 2020 and 2019 are as follows:

(Unit: Million Baht)

Consolidated Separate financial statements financial statements

31 December 31 December 31 December 31 December 2020 2019 2020 2019

Deposits Parent company Financial Institutions Development Fund 20 - 20 -

Subsidiaries KTB Law Co., Ltd. - - 401 501 KTB General Services and Security Co., Ltd. - - 773 703 KTB Computer Services Co., Ltd. - - 350 276 KTB Leasing Co., Ltd. - - 257 190

KTB Advisory Co., Ltd. - - 3 44

Krungthai Card Plc. - - 1,469 881

Infinitas by Krungthai Co.,Ltd. - - 300 -

124 Annual Report 2020 329

(Unit: Million Baht)

Consolidated Separate financial statements financial statements

31 December 31 December 31 December 31 December 2020 2019 2020 2019

Deposits (cont’d) Associated companies Krung Thai IBJ Leasing Co., Ltd. 31 19 31 19

Krungthai Panich Insurance Plc. 245 401 245 401 Related parties with directors or key management personnel 10,198 7,410 10,198 7,410

Related parties in which the Bank acquired 10

percent or more of paid-up capital from TDR 622 239 622 239

Interbank and money market items (liabilities) Subsidiary Krung Thai Asset Management Plc. - - 158 303

Associated companies Krungthai-AXA Life Insurance Plc. 4,789 6,581 4,789 6,581 Krungthai Zmico Securities Co., Ltd. 42 19 42 19

Other liabilities Subsidiaries KTB General Services and Security Co., Ltd. - - 344 240 KTB Computer Services Co., Ltd. - - 638 709

Krungthai Card Plc. - - 2 1 KTB Law Co., Ltd. - - 104 126

Associated companies Krungthai Panich Insurance Plc. 12 9 12 9 Krungthai-AXA Life Insurance Plc. 14 26 7 26 National ITMX Co., Ltd. 27 16 27 16

125 330

9.27.4 Income and expenses

The Bank has significant income and expenses with related parties as follows:

(Unit: Million Baht)

For the years ended 31 December

Consolidated Separate financial statements financial statements

2020 2019 2020 2019

Interest income

Subsidiaries KTB Computer Services Co., Ltd. - - 43 70 KTB Leasing Co., Ltd. - - 25 123 Krungthai Card Plc. - - 55 59 Associated companies Krungthai Zmico Securities Co., Ltd. 9 22 9 22 Krung Thai IBJ Leasing Co., Ltd. 68 71 68 71 Related parties with directors or key management personnel 201 740 201 740

Related parties in which the Bank acquired 10 percent or more of paid-up capital from TDR 34 39 34 39

Interest expenses Subsidiaries KTB Law Co., Ltd. - - 3 4 KTB General Services and Security Co., Ltd. - - 4 5 Krungthai Card Plc. - - 2 2

Krung Thai Asset Management Plc. - - 1 1 KTB Computer Services Co., Ltd. - - 1 - KTB Leasing Co., Ltd. - - 1 - Associated companies Krungthai Panich Insurance Plc. 2 2 2 2 Krungthai-AXA Life Insurance Plc. 113 160 113 160 Krung Thai IBJ Leasing Co., Ltd. 2 - 2 - Krungthai Zmico Securities Co., Ltd. 2 - - - Related parties with directors or key

management personnel 95 28 95 28 Related parties in which the Bank acquired

10 percent or more of paid-up capital from TDR 1 3 1 3 126 Annual Report 2020 331

(Unit: Million Baht) For the years ended 31 December

Consolidated Separate financial statements financial statements

2020 2019 2020 2019

Other income Subsidiaries KTB General Services and Security Co., Ltd. - - 9 5 KTB Leasing Co., Ltd. - - 8 21 Krung Thai Asset Management Plc. - - 816 651 Krungthai Card Plc. - - 222 268 Associated companies Krung Thai IBJ Leasing Co., Ltd. 7 8 7 8 Krungthai Zmico Securities Co., Ltd. 5 8 4 8 Krungthai Panich Insurance Plc. 327 191 305 191 Krungthai-AXA Life Insurance Plc. 2,226 2,203 2,110 2,203

Other expenses

Subsidiaries KTB Law Co., Ltd. - - 380 774 KTB General Services and Security Co., Ltd. - - 2,317 2,370 KTB Computer Services Co., Ltd. - - 3,618 3,676 Krungthai Card Plc. - - 6 7 Associated companies Krung Thai IBJ Leasing Co., Ltd. 12 36 - 36 Krungthai Zmico Securities Co., Ltd. 9 9 8 9 National ITMX Co., Ltd. 242 181 242 181 Krungthai-AXA Life Insurance Plc. 74 - - - Krungthai Panich Insurance Plc. 18 - - -

9.27.5 The Bank and its subsidiaries have no compensation or other benefits, either monetary or non-monetary, to directors and executives, except the benefits normally paid as follows:

(Unit: Million Baht)

For the years ended 31 December

Consolidated Separate financial statements financial statements

2020 2019 2020 2019

Short-term employee benefits 1,266 1,186 907 797

Post-employment benefits 49 63 29 27

Total 1,315 1,249 936 824

127 332

9.27.6 Intercompany trading transactions Subsidiaries 1) KTB Computer Services Co, Ltd. has been designated mainly to provide information technology (IT) services for the Bank’s operations in accordance with the various projects and systems of the Bank, in accordance with the Bank’s business plans. Service offers consist of system control and maintenance, system software development, and providing preliminary consultancy services and training in various areas. The Bank incurred service charges on a cost-plus method of Baht 3,487 million and Baht 3,545 million for the years ended 31 December 2020 and 2019, respectively. 2) Since 2003, the GFMIS project Phase 2 has been developed and implemented on behalf of the Bank by KTBCS. The Bank and the Office of GFMIS attached to the Secretariat of the Prime Minister unanimously signed on the Memorandum of Agreement upon the submission of deliverables and disbursements associated with the investments in the GFMIS project on 22 September 2005. Furthermore, the Bank signed a hire-of-work contract for the implementation and maintenance with the Office of GFMIS. The Bank incurred service charges of Baht 131 million and Baht 131 million for the years ended 31 December 2020 and 2019, respectively. 3) The Bank operates a student loan service for the Student Loans Fund, including public relations, policy, regulation, loan payment, document filling, loan notification, loan status, as well as receipt of settlement, pursuit of loan collection, and prosecution. KTB Law Co., Ltd. has been designated to prosecute debtors of the Student Loans Fund. The Bank incurred service charges for the years ended 31 December 2020 and 2019 of Baht 165 million and Baht 590 million, respectively. 4) KTB General Services and Security Co., Ltd. is assigned by the Bank to provide collection and delivery services for all cash, foreign exchange and financial instruments, and the Bank’s asset. KTBGS also manages Krung Thai Bank Training Center and the Bank’s other buildings. The Bank’ s expenses in respect of those services for the years ended 31 December 2020 and 2019 were Baht 2,317 million and Baht 2,371 million, respectively. 5) The Bank incurred service charges provided by its subsidiaries [including fees mentioned in No.1) to 3)] totaling Baht 6,321 million and Baht 6,828 million for the years ended 31 December 2020 and 2019, respectively, at the rates as mutually agreed. 6) The Bank generated fee income from service with subsidiaries for the years ended 31 December 2020 and 2019, amounting to Baht 797 million and Baht 857 million, respectively. 7) The Bank generated premises rental income from subsidiaries of Baht 3 million and Baht 20 million for the years ended 31 December 2020 and 2019, respectively, at the rate upon agreement. 128 Annual Report 2020 333

Intercompany considerations Intercompany income and expenses are based on the rates upon agreement and the amount specified in the contract, while the cost-plus method is used for certain transactions. The consolidated financial statements include the accounts of subsidiaries after eliminating intercompany transactions and balances.

Associated companies The Bank generated fee income under support service contracts of Baht 2,426 million and Baht 2,410 million for the years ended 31 December 2020 and 2019, respectively, at the rate upon agreement.

9.28.1 Financial position classified by business segment

(Unit: Million Baht)

Consolidated financial statements

31 December 2020 31 December 2019

Foreign Foreign Domestic branches Domestic branch business business Elimination Total business business Elimination Total

Total assets 3,323,187 19,261 (14,668) 3,327,780 2,999,664 20,960 (8,408) 3,012,216 Interbank and money market items - net 508,031 8,761 - 516,792 329,785 8,986 - 338,771 Financial assets measured at fair value through profit or loss 13,724 - - 13,724 - - - - Investments - net* 344,433 1,955 - 346,388 423,820 2,354 - 426,174 Loans to customers and accrued interest receivables - net 2,192,197 8,316 - 2,200,513 1,950,481 9,284 - 1,959,765

Deposits 2,458,740 4,485 - 2,463,225 2,151,130 4,735 - 2,155,865 Interbank and money market items 274,553 13 - 274,566 215,810 13 - 215,823 Debt issued and borrowings 86,564 - - 86,564 89,519 7,322 - 96,841

* Includes investments in subsidiaries and associated companies.

129 334

(Unit: Million Baht) Separate financial statements

31 December 2020 31 December 2019

Foreign Foreign

Domestic branches Domestic branches business business business business segment segment Elimination Total segment segment Elimination Total

Total assets 3,222,394 19,261 (14,668) 3,226,987 2,895,806 20,960 (8,408) 2,908,358 Interbank and money market items - net 507,560 8,761 - 516,321 329,288 8,986 - 338,274 Financial assets measured at fair value through profit or loss 14,188 - - 14,188 - - - - Investments - net* 326,144 1,955 - 328,099 403,650 2,354 - 406,004 Loans to customers and accrued interest receivables - net 2,118,773 8,316 - 2,127,089 1,874,826 9,284 - 1,884,110 Deposits 2,462,295 4,485 - 2,466,780 2,153,725 4,735 - 2,158,460 Interbank and money market items 268,412 13 - 268,425 208,228 12 - 208,240 Debt issued and borrowings 44,292 - - 44,292 44,001 7,322 - 51,323

* Includes investments in subsidiaries and associated companies.

9.28.2 Operations classified by business segment

(Unit: Million Baht) Consolidated financial statements For the years ended 31 December

2020 2019

Foreign Foreign

Domestic branches Related Domestic branches Related business business party business business party segment segment transactions Total segment segment transactions Total

Interest income 112,323 884 (370) 112,837 122,160 2,890 (2,079) 122,971

Interest expenses (24,425) (439) 370 (24,494) (34,552) (2,182) 2,079 (34,655) Interest income - net 87,898 445 - 88,343 87,608 708 - 88,316 Fees and service income - net 20,464 64 - 20,528 23,185 53 - 23,238 Other operating income 13,409 (32) - 13,377 14,018 85 - 14,103 Other operating expenses and allowance for expected credit loss/impairment losses of loans and debt securities (98,177) (191) - (98,368) (86,038) (249) - (86,287) Profit from operating before income tax expenses 23,594 286 - 23,880 38,773 597 - 39,370 130 Annual Report 2020 335

(Unit: Million Baht)

Separate financial statements

For the years ended 31 December

2020 2019

Foreign Foreign

Domestic branches Related Domestic branches Related business business party business business party segment segment transactions Total segment segment transactions Total

Interest income 97,381 884 (370) 97,895 107,509 2,890 (2,079) 108,320

Interest expenses (22,927) (439) 370 (22,996) (33,058) (2,182) 2,079 (33,161) Interest income - net 74,454 445 - 74,899 74,451 708 - 75,159 Fees and service income - net 16,309 64 - 16,373 18,516 53 - 18,569 Other operating income 10,225 (32) - 10,193 11,072 85 - 11,157 Other operating expenses and allowance for expected credit loss/impairment losses of loans and debt securities (85,198) (191) - (85,389) (72,732) (249) - (72,981) Profit from operating before income tax expenses 15,790 286 - 16,076 31,307 597 - 31,904

Segment definition

The Bank organises segments for internal management purposes, with the Management Committee of each segment being the chief operating decision- maker (CODM). Three reportable segments have been identified based on customer type and nature of business:

1) Retail banking segment; develops financial products and services, and also provides services for individual customers relating to deposits, loans, payment for goods and services as well as sale of products released by the Bank’ s subsidiaries and business alliances through its network of branches nationwide.

2) Wholesale banking segment; provides credit facilities and financial services to corporate clients.

3) Treasury and investment segment; controls the Bank’ s financial structure to maintain appropriate levels and enable the generation of profit from the Bank’s equity investment, international business and excess liquidity, and also supervises overseas branches and companies in which the Bank has invested, among others.

Other segments comprise of middle offices, back offices, subsidiaries and associated companies. 131 336

Accounting procedures for segment reporting

The accounting procedures for the operating segments are based on the principle of Economic Value Management (EVM), whereby performance is measured on the same basis as that used in the internal management reports that are reviewed by the Bank’s CODM. In accordance with the EVM concept, which is different from the accounting policy use for the preparation of financial statements, all business units are treated as profit centers, with Internal Service Charges (ISC) between the service providing unit and service receiving unit. The Fund Transfer Pricing (FTP) concept is used to calculate the value of funds for the fund provider unit and the cost of funds for fund user unit. Income and expenses are allocated according to ownership in order to derive the net operating profit after tax (NOPAT).

(Unit: Million Baht)

Consolidated financial statements

For the years ended 31 December 2020

Retail Wholesale Treasury and Support and banking banking investment others Eliminations Total

Total operating income 50,538 28,815 6,481 42,861 (6,447) 122,248 Total expenses and tax expenses (excluding expected credit losses) (30,625) (6,334) (2,330) (24,794) 6,177 (57,906)

Expected credit losses (12,735) (25,292) (1,051) (5,755) (70) (44,903)

Net profit 7,178 (2,811) 3,100 12,312 (340) 19,439

(Unit: Million Baht) Consolidated financial statements

For the years ended 31 December 2019

Retail Wholesale Treasury and Support and banking banking investment others Eliminations Total

Total operating income 50,121 32,799 8,746 44,226 (10,234) 125,658 Total expenses and tax expenses (excluding impairment losses of loans and debt securities) (32,550) (16,305) (2,849) (24,632) 6,630 (69,706) Impairment losses of loans and debt securities (1,814) (5,928) (166) (15,906) - (23,814)

Net profit 15,757 10,566 5,731 3,688 (3,604) 32,138

132 Annual Report 2020 337

Assets and liabilities for segment of the Bank and its subsidiaries as at 31 December 2020 and 2019 are as follows.

(Unit: Million Baht) Consolidated financial statements

Retail Wholesale Treasury and Support and banking banking investment others Eliminations Total

As at 31 December 2020: Segment assets 988,351 1,208,867 943,799 187,601 (838) 3,327,780 Segment liabilities 1,711,923 839,087 200,543 239,613 (18,449) 2,972,717

As at 31 December 2019: Segment assets 934,786 1,076,578 857,030 148,926 (5,104) 3,012,216 Segment liabilities 1,570,438 671,319 228,333 196,987 (3,187) 2,663,890

Information about major customers

During the years ended 31 December 2020 and 2019, the Bank and its subsidiaries have no major customer with revenue of 10 percent or more of an entity’s revenues.

Interest income for the years ended 31 December 2020 and 2019 consisted of the following:

(Unit: Million Baht)

For the years ended 31 December

Consolidated Separate financial statements financial statements

2020 2019 2020 2019

Interbank and money market items 3,594 7,113 3,594 7,113 Investment and trading transactions 435 482 435 482

Investment in debt securities 4,251 4,943 4,266 4,953 Loans to customers * 104,307 109,784 89,533 95,569 Hire-purchase and finance leases 184 428 - -

Others 66 221 66 203

Total interest income 112,837 122,971 97,894 108,320

* Interest income from loans to customers for the years ended 31 December 2020 and 2019, including payment from the auction of property, mortgage collateral, of one debtor, amounting to Baht 4,747 million and Baht 3,899 million (Note 9.42.1 to consolidated financial statements).

133 338

Interest expenses for the years ended 31 December 2020 and 2019 consisted of the following:

(Unit: Million Baht) For the years ended 31 December

Consolidated Separate financial statements financial statements

2020 2019 2020 2019

Deposits 13,765 17,861 13,775 17,873 Interbank and money market items 1,860 2,532 1,788 2,454 Contributions to Bank of Thailand (BOT) 5,450 9,766 5,450 9,766 Contributions to Deposit Protection Agency (DPA) 237 212 237 212 Debt issued - Subordinated debentures 1,655 2,655 1,655 2,655 - Others 1,411 1,407 - - Borrowings 4 3 1 2 Borrowing fees 10 20 - -

Others 102 199 90 199

Total interest expenses 24,494 34,655 22,996 33,161

Fees and service income for the years ended 31 December 2020 and 2019 consisted of the following:

(Unit: Million Baht)

For the years ended 31 December Consolidated Separate

financial statements financial statements

2020 2019 2020 2019 Fees and service income Acceptance, aval and guarantees 1,279 1,674 1,279 1,674 ATM and electronic banking services 11,886 11,988 11,886 11,988 Management fees and Bancassurance Product 5,949 5,287 3,827 3,621

Others 8,576 10,647 4,565 5,992

Total fees and service income 27,690 29,596 21,557 23,275

Fees and service expenses (7,162) (6,359) (5,184) (4,706)

Net fees and service income 20,528 23,237 16,373 18,569

134 Annual Report 2020 339

(Unit: Million Baht) For the years ended 31 December 2020

Consolidated Separate financial statements financial statements

Gains (losses) on trading and foreign exchange transactions - Foreign exchange and foreign exchange element of derivatives contracts 1,713 1,713 - Interest rate element of derivatives contracts 923 986 - Debt securities (226) (226) - Others 735 735 Losses from hedge accounting - hedged items (11) (11)

Total 3,134 3,197

(Unit: Million Baht)

For the years ended 31 December 2019 Consolidated Separate

financial statements financial statements

Gains (losses) on trading and foreign exchange transactions - Foreign exchange and foreign exchange element of derivatives contracts 1,378 1,378 - Interest rate element of derivatives contracts 1,356 1,355 - Debt securities 1,246 1,246 - Others (783) (783)

Total 3,197 3,196

135 340

Gains on investments for the years ended 31 December 2020 and 2019 consisted of the following:

(Unit: Million Baht) For the years ended 31 December Consolidated Separate financial statements financial statements

2020 2019 2020 2019 Gains on derecognition of - Investments in debt securities measured at fair value through other comprehensive income 951 - 951 - - Available-for-sale securities - 3,958 - 3,958 - General investments - 47 - 47 - Investment in subsidiaries - 410 - 410 Total 951 4,415 951 4,415 Reversal (losses) on impairment of - General investments - (43) - (43) - Investments in subsidiaries - - (10) 3 Total - (43) (10) (40) Total gains on investments 951 4,372 941 4,375

Expected credit losses and gains or losses resulting from modification of tems for financial assets for the year ended 31 December 2020 are as follows:

(Unit: Million Baht)

For the year ended 31 December 2020 Consolidated Separate financial statements financial statements

Interbank and money market items (assets) 1,102 1,102 Investments in debt securities measured at amortised cost 9 9 Investments in debt securities measured at fair value through other comprehensive income 869 869 Loans to customers and accrued interest receivables - Expected credit losses 39,660 33,185

- Losses from modification of contracts 305 305

Total 41,945 35,470 Loan commitments and financial guarantee contracts 2,958 2,958

Total 44,903 38,428

136 Annual Report 2020 341

(Unit: Million Baht)

For the year ended 31 December 2019 Consolidated Separate

financial statements financial statements

Interbank and money market items (592) (592)

Loans to customers 24,366 18,056

Losses from troubled debt restructuring 40 40

Total 23,814 17,504

Basic earnings per share is calculated by dividing profit for the years attributable to ordinary shareholders of the Bank (after deducting the preferred shares’s portion and excluding other comprehensive income) by the weighted average number of ordinary shares issued during the years.

For the years ended 31 December

Consolidated Separate

financial statements financial statements

2020 2019 2020 2019 Profit for the years attributable to equity holders of the Bank (after deducting preferred shares’ portion) (Million Baht) 16,728 29,280 13,288 26,322 Earnings per share (Baht/share) 1.20 2.09 0.95 1.88 Weighted average number of ordinary shares (Million shares) 13,976 13,976 13,976 13,976

The Bank, its subsidiaries and its employees have jointly established a provident fund in accordance with the Provident Fund Act B. E. 2530. Employees contributed to the fund monthly, at rates of 3 - 15 percent of their basic salaries, and the Bank and its subsidiaries contributed to the fund at stipulated rates. The fund will be paid to the employees upon termination of employment in accordance with the fund rules. During the year ended 31 December 2020, the Bank and its subsidiaries contributed Baht 1,518 million to the fund (separate financial statements: Baht 1,359 million) (2019: Baht 1,526 million in the consolidated financial statements and Baht 1,369 million in the separate financial statements).

137 342

Financial assets and liabilities carried at fair value classified by the level of fair value hierarchy are as follows:

(Unit: Million Baht)

Consolidated financial statements

31 December 2020 31 December 2019

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Financial assets and liabilities measured at fair value Financial assets Financial assets measured at fair value through profit or loss 792 12,932 - 13,724 - - - - Investments in debt securities measured at fair value through other comprehensive income 17,648 282,857 - 300,505 - - - - Investments in equity securities designated at fair value through other comprehensive income 13,583 655 505 14,743 - - - - Derivatives assets - 74,507 - 74,507 - 55,811 - 55,811 Trading investments - - - - 18,489 29,763 - 48,252 Available-for-sale investments - - - - 48,355 295,843 - 344,198 Financial liabilities Derivatives liabilities - 65,471 - 65,471 - 51,869 - 51,869

(Unit: Million Baht) Separate financial statements 31 December 2020 31 December 2019 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Financial assets and liabilities measured at fair value Financial assets Financial assets measured at fair value through profit or loss 792 13,396 - 14,188 - - - - Investments in debt securities measured at

fair value through other comprehensive income 17,648 283,611 - 301,259 - - - - Investments in equity

securities designated at

fair value through other comprehensive income 13,583 652 505 14,740 - - - - Derivatives assets - 74,507 - 74,507 - 55,811 - 55,811 Trading investments - - - - 18,489 29,763 - 48,252 Available-for-sale investments - - - - 48,355 296,501 - 344,856 Financial liabilities Derivatives liabilities - 65,471 - 65,471 - 51,869 - 51,869

138 Annual Report 2020 343

Since the majority of the Bank’ s financial instruments are short- term in nature or carrying interest at rates close to the market interest rates, their fair value is assumed to approximate thier book value in the statement of financial position. Valuation techniques and inputs used for fair value measurement Cash - The fair value is assumed to approximate its book value in the statement of financial position. Interbank and money market - The fair value is assumed to approximate their book value items (asset) in the statement of financial position due to their short-term nature. Derivatives - The fair value of derivatives is calculated using valuation techniques that include the discounted cash flow model and option pricing model, commonly used by market participants. The information used in the valuation techniques is observable in the market, which is based on reliable sources, such as interest rates, exchange rates and votalities etc. Moreover, in using valuation techniques, the Bank has adjusted valuation adjustment in order to appropriately reflect relevant risks such as credit valuation adjustment (CVA), market liquidity risk based on Bid-Offer spread and model risk used in the option pricing for SMEs insurance scheme etc. Investments - The fair value of marketable securities is based on the latest bid price of the last working day of the year. - The fair value of domestic debt securities is determined using the yield rates quoted by the Thai Bond Market Association. - The fair value of foreign debt securities is determined based on the latest published price obtained from reliable sources. - The fair value of unit trusts is determined from their net asset value - The fair value of investments in non- marketable equity securities is determined using their latest book value from the entity’s financial statements. - The Bank has adjusted valuation adjustment in order to appropriately reflect market liquidity risk based on Bid-Offer Spread Adjustment. Loans to customers - The fair value of floating rate loans is assumed to approximate their book value, net of allowance for doubtful debt and allowance for debt restructuring. - The fair value of fixed rate loans is determined by discounting the expected future cash flows at the interest rate of similar loans, net of allowance for doubtful debt and deferred revenue. - The fair value of fixed rate loans for which revenue recognition has discontinued is assumend to approximate their book value, net of allowance for doubtful debt or to approximate the amount expected to be derived from their sale. 139 344

Land, premises and - The fair value of land is determined by using the market Land,equipment premises - land and - comparisonThe fair value approach of land whichis determined is used bywhereby using thethe marketbuying equipment - land andcomparison selling prices approach for assets which with is used similar whereby characteristics the buying are obtainedand selling. prices for assets with similar characteristics are Deposits - Theobtained fair value. of payable on demand deposits, floating rate Deposits - depositsThe fair value or fixed of payable rate deposits on demand with notdeposits, more thanfloating 1 yearrate fromdeposits the orstatement fixed rate of depositsfinancial withposition not datemore remaining than 1 year to maturityfrom the isstatement assumed of to financialapproximate position their date book remaining values. to - Thematurity fair valueis assumed of fixed to rate approximate deposits withtheir morebook thvaluesan 1 .year - fromThe fairthe value statement of fixed of ratefinancial deposits position with datemore remaining than 1 year to maturityfrom the isstatement determined of financialby discounting position the date expected remaining future to cashmaturity flows is determinedat the Bank ’sby interest discounting rate for the similar expected deposits future. Interbank and money market - Thecash fairflows value at the of Bank interbank’s interest and rate money for similar market deposits items. Interbankitems ( liabilitiesand money) market - payableThe fair onvalue demand, of interbank floating rateand depositsmoney marketor fixed items rate items (liabilities) depositspayable onwith demand, not more floating than 1 rateyear depositsfrom the orstatement fixed rate of financialdeposits positionwith not datemore remaining than 1 year to maturity from the is statement assumed ofto approximatefinancial position their date book remaining values. to maturity is assumed to - Theapproximate fair valu etheir of fixedbook valuesrate interbank. and money market - Theitems fair with valu moree of than fixed 1 yearrate frominterbank the statement and money of financial market itemsposition with date more remaining than 1 year to from maturity the statement is determined of financial by discountingposition date the remaining expected futureto maturity cash flowsis determined at the market by interestdiscounting rate theof debt expected or the futureBank’ scash announc flowsed at interest the market rate forinterest similar rate deposits of debt. or the Bank’ s announced interest rate for similar deposits. Liability payable on demand - The fair value is assumed to approximate its book value in the Liability payable on demand - statementThe fair value of financial is assumed position to approximate due to its short its book-term value nature in .the Debt issued and borrowings - Thestatement fair value of financial of floating position rate dueor fixed to its rate short debt-term issues nature and. Debt issued and borrowings - borrowingsThe fair value with of not floating more ratethan or 1 yearfixed fromrate thedebt statement issues and of financialborrowings position with not date more remaining than 1 year to maturity from the is statementassumed toof approximatefinancial position their date book remaining values. to maturity is assumed to - approximateThe fair value their of fixed book rate values debt. issues and borrowings with - Themore fair than value 1 year of fixed from rate the debt statement issues andof financial borrowings position with moredate remaining than 1 year to maturityfrom the is statement determined of by financial discounting position the dateexpected remaining future to cash maturity flows is atdetermined the market by interest discounting rate thefor similarexpected debt future. cash flows at the market interest rate for similar debt. During the current year, the Bank changed the fair value hierarchy as follows. During the current year, the Bank changed the fair value hierarchy as follows. Fair value hierarchy from - The fair value of unit trusts is calculated from the net asset Fairlevel value 1 to hierarchy level 2 from - valueThe fair of valueunit trusts of unit received trusts is fromcalculated the asset from managementthe net asset level 1 to level 2 companyvalue of unit trusts received from the asset management - Thecompany fair value of foreign currency corporate bond is - calculatedThe fair value from theof latestforeign bid currency price at thecorporate end of businessbond is daycalculated from Bloomberg from the latest. bid price at the end of business Fair value hierarchy from - Theday fromfair valueBloomberg of investments. in non- marketable equity Fairlevel value 2 to hierarchy level 3 from - securitiesThe fair value is determined of investments using their in non latest- marketable book value equity from level 2 to level 3 thesecurities entity’ sis financial determined statements using their. latest book value from the entity’s financial statements.

140 140 Annual Report 2020 345

The BOT’s Notifications No.SOR NOR SOR. 5/2560 and SOR NOR SOR. 9/2560 dated 27 April 2017, SOR NOR SOR. 8/2561 dated 11 April 2018, SOR NOR SOR. 12/2561 dated 22 May 2018, and SOR NOR SOR. 11/ 2562 dated 7 May 2019 regarding the Consolidated Supervision Policy, require the Bank to disclose policies on business transactions within the financial business group and risk management policies in relation to business transactions within the financial business group as the compliance guidance to supervise business transactions within the financial business group, which is composed of the Bank and 19 companies ( Note 9. 7 excluding National ITMX Co. , Ltd. and BCI ( Thailand) Co. , Ltd. ) , in terms of common standards and procedures in alignment to the BOT’ s consolidated supervision policy. The policies on business transactions within the financial business group and risk management policies in relation to business transactions within the financial business group had been approved by the Bank's Board of Directors and reviewed at least once a year. The policies cover types of transaction, rules and regulations for business transactions, the ratio of business transactions within the financial business group, capital requirements of the financial business group and other related operating procedures. Business transactions within the group are conducted in the same manner as to the public with contract entitled by law and follow the Bank's corporate governance policy. In cases of the Bank having business transactions with a company within the financial business group in which such company is deemed to be the Bank's business unit, the Bank will follow the lenient business transaction guidline as provided by BOT.

9.42.1 The Bank has certain defaulting debtors in relation to convertible preferred shares sale and purchase agreement and lending facilities with the outstanding principal amounts according to the related sale and purchase agreements and facilities agreements, as of 31 December 2020 totaling Baht 9,745 million, exclusive of the default interests. In this regard, for such outstanding principal amounts, the Bank has fully made a provision for impairment and allowance for doubtful accounts according to the Bank of Thailand’s criteria and it is currently in the execution process according to the orders of the Civil Court and the Bankruptcy Court. In addition, such debtors together with other defendants were connected to a lawsuit of the Office of the Attorney General which was submitted to the Criminal Division for Persons Holding Political Positions of the Supreme Court's ( the “ Supreme Court”). The Supreme Court had ordered an acceptance of the complaint on 25 July 2012 and thereafter rendered a judgement on 26 August 2015 that all defendants shall be jointly liable for damages to the Bank. The Bank had submitted a letter to the Office of the Attorney General requesting the Department of Legal Execution, the Office of the Attorney General to execute a judgement for the Bank. In January 2016, the Office of the Attorney General had submitted a motion to the Supreme Court requesting for a writ of execution for appointing the executing officers and the Supreme Court ordered and appointed the executing officers. In this respect, the Bank had notified the public prosecutor of the result of a search for all judgment debtors’ property. On 5 October 2016, the public prosecutor of the Department of Special Litigation arranged a meeting for representatives from the Bank of Thailand, the Anti- Money Laundering Office ( AMLO) and the Bank to consider the issues regarding the legal execution of the Supreme Court’ s judgement and to coordinate and exchange information. Each party will legally 141 346

exercise its authority and the Supreme Court’ s order to enforce all defendants for the best interest of the Bank’s benefits and legal rights. On 17 August 2017, a defendant of the criminal case of the Persons Holding Political Positions, who was not a defaulting debtor of the civil case, had made a payment of Baht 1,636 million to the Bank for payment of partial damages according to such criminal case. The Bank accepted the payment and recorded such payment as other revenue from a lawsuit compensation, as well as issuing a letter to such defendant demanding for payment of the remaining damages together with all relevant defendants to the Bank according to such judgement. At present, judgments of the criminal case, other bankruptcy and civil cases have been enforced for confiscation of the mortgaged collaterals according to the preferred mortgage in the Bank’s civil case for public auction. The court had issued an order for the Bank to receive debt payment as a mortgagee from such mortgaged collaterals according to an application for repayment of the mortgaged debt submitted by the Bank. Thereafter, on 17 October 2018, the Legal Execution Department made an announcement of public auction and managed the proceedings of public auction for the mortgaged collaterals; whereby, a third party was the successful bidder for Baht 8,914 million. In 2019, the Bank has received the net amount of Baht 3,899 million from the Legal Execution Department for the mortgaged collaterals according to the preferred mortgage which were sold under the criminal case. The Bank exercised the right pursuant to Thai laws by deducting fees and litigation expenses of the Bank for Baht 1 million, and the remaining amount of Baht 3,898 million after deduction of the Legal Execution Department’s expenses was considered as interest payment according to the judgment of the Bank’s civil case. In this respect, on 25 September 2019, a defendant of the criminal case has filed a civil lawsuit against the Bank to take the lawsuit amount to be recorded as the damages pursuant to the judgment of such criminal case in which the Bank submitted the defending response, affirming the Bank’ s action. In 2020, the Bank had received net payment from the Legal Execution Department for the mortgaged collaterals which had been sold in other bankruptcy cases in the amount of Baht 3,524 million. The Bank exercised the right pursuant to Thai laws by deducting expenses in relation to auction announcement of Baht 0. 02 million, and the remaining amount of Baht 3,524 million was considered as interest payment according to the judgement of the Bank’s civil case. For other civil cases, currently, the Bank has received the net amount of Baht 1,223 million from the Legal Execution Department for the mortgaged collaterals according to the preferred mortgage which were sold under civil cases. The Bank exercised the right pursuant to Thai laws by deducting for interest in the amount of Baht 1,223 million according to the judgment of the Bank’ s civil case. On July 8, 2020, the Legal Execution Department made an announcement of public auction for the remaining 1 plot of land from the collateral in a criminal case, and managed the proceedings of public auction for such mortgaged collateral; whereby, a third party was the successful bidder for Baht 7.29 million, with the payment due date on 22 February 2021. For the Bank’ s civil case, whereby the Bank was a plaintiff suing for the foreclosure of such mortgaged collaterals, the Civil Court had rendered a judgment in favor of the Bank to receive full payment of debt according to the grounds of the lawsuit together with interest on 28 September 2017. Thereafter, on 31 October 2018, the Court of Appeal had issued an appointment for the hearing of judgement, which upheld the judgment of the Civil Court. The defendant had filed a petition to the Supreme Court on 25 December 2018 and the Bank had filed an answer against such defendant’ s petition on 25 February 2019. Currently, the

142 Annual Report 2020 347

Supreme Court had rendered a judgement on 5 May 2020 which upheld the judgement of the Court of Appeal. 9.42.2 In 2010, the Bank lent a company USD 96 million ( Baht 2,885 million) , for which an investment in the ordinary shares of a foreign financial institution was pledged as collateral. Although these shares, accounting for 50 percent of such financial instituation’ s authorised shares capital, were under the Bank’s name, the Bank had no control over this financial institution. The Bank received full repayment of the loan under the contract in July 2011 but had not yet transferred such pledged ordinary shares back to the company because the company must first seek a financial institution to be a new investor of such financial institution. 9.42.3 The Bank considers factors for closing certain branch in foreign country according to advice from its legal consultants. The assets, liabilities and operating performance of such branch are not material to the Bank’s financial statements.

As a result of the COVID - 19 pandemic having a widespread impact on all business sectors and customer segments across Thailand, the Bank of Thailand has issued a series of measures, covering payment moratoriums, government guarantees as well as payment holidays to get bank helped affected borrowers and industries that are encountering short- term cash flow problems to resume repayment ability at the end. As at 31 December 2020, the outstanding balances of loans to customers that the Bank has assisted in accordance with the measures of the Bank of Thailand amounting to Baht 201 billion.

On 10 February 2021, the Board of Directors of the Bank passed a resolution to approve in principle and to proceed for a 75.05 percent sale of investments in KTB Leasing Co., Ltd. to Krungthai Card Plc.

These financial statements were authorised for issue by the Board of Directors on 24 February 2021.

143 348

General Information and Other Major Information

1. Company Information Name of Company : Krung Thai Bank Public Company Limited Business Type : Commercial Banking Head Office : 35 Sukhumvit Road, Klong Toey Nua Subdistrict, Wattana District, Bangkok 10110 Registration Number : 0107537000882 (formerly Bor.Mor.Jor.335) The Bank registered its transformation to public limited company on March 24, 1994 Head Office : Building 1: 35 Sukhumvit Road, Klong Toey Nua Subdistrict, Wattana District, Bangkok 10110 Tel.: +662 255-2222 Fax.: +662 255-9391-3 Building 2: 10 Sukhumvit Road, Klong Toey Subdistrict, Klong Toey District, Bangkok 10110 Tel.: +662 208-7000, 8000 Fax.: +662 255-9391 Home Page : krungthai.com Krungthai Contact Center : +662 111-1111

2. Bank’s Shares 2.1 Number and Type of the Total Shares Issued As at December 31, 2020 Bank’s registered and paid-up capital amounted to 72,005,040,437.50 Baht classified into Ordinary shares amounted to 13,976,061,250 shares at THB 5.15 per share Preferred shares amounted to 5,500,000 shares at THB 5.15 per share Total 13,981,561,250 shares Annual Report 2020 349

2.2 Debt Instruments or Convertible Securities

Type/Name of Debt Redemption Type of Issuance Date Credit Rating Outstanding Period Instruments Date Offerings

Nov. 23, 2017 Subordinated Instruments AA- (tha) THB 20,000 10 yrs. Nov. 23, 2027 Offered for sale intended to qualify as Tier 2 (Fitch Ratings million (Call option in Thailand for Capital of Krungthai Thailand) in 5th year) institutional Bank PCL.No. 1/2017 investors and/or (Redemption in 2027). The high net worth Subordinated Instruments investors are redeemable at the instance of the issuer before the maturity date and can be written down (fully or partially) after the official decided to offer financial aid. Jun. 1, 2018 USD Debentures of Krungthai AA+ (tha) USD 230 5 yrs. Jun. 1, 2023 Offered for sale Bank PCL. No. 1/2018 (Fitch Ratings million in Thailand for (Redemption in 2023). Thailand) institutional investors and/or high net worth investors Jul. 12, 2019 Subordinated Instruments AA- (tha) THB 24,000 10 ปี Jul. 12, 2029 Offered for sale intended to qualify as Tier 2 (Fitch Ratings million (Call option in Thailand for Capital of Krungthai Thailand) in 5th year) institutional Bank PCL.No. 1/2019 investors and/or (Redemption in 2029). The high net worth Subordinated Instruments investors are redeemable at the instance of the issuer before the maturity date and can be written down (fully or partially) after the official decided to offer financial aid. 350

3. Companies in which Krungthai Bank holds 10 percent or more of the total shares issued As at December 31, 2020

Shareholding Ratio Direct Holding of Shares Indirect Total Shares (1) Type of Company Type of Business Invested by the Bank Holding Issued Share No. of Shares Percentage of Percentage of Invested Shareholding Shareholding Life / Non-Life Insurance 1. Krungthai-AXA Life Insurance Pcl. Life Insurance 135,500,000 67,750,000 50.00 - Ordinary 9 G Tower Grand Rama 9, 1st ,20th-27th Fl., Rama 9 Rd., Huaykwang, Bangkok 10310 Customer Service : 1159 E-mail : [email protected] 2. Krungthai Panich Insurance Pcl. Non-Life Insurance 33,000,000 14,850,000 45.00 - Ordinary 1122 KPI Tower, New Phetchaburi Rd., Makasun, Rajathevi, Bangkok 10400 Tel. : +662 624-1111 Fax. : +662 624-1234 3. Dhipaya Insurance Pcl. Non-Life Insurance 600,000,000 60,000,000 10.00 - Ordinary 1115 Rama 3 Road, Chong Nonsi, Yannawa, Bangkok 10120 Tel. : +662 239-2200 Hire Purchase / Leasing 4. KTB Leasing Co., Ltd. Hire Purchase 100,000,000 99,999,993 100.00 - Ordinary 20 Suan Mali Tower, 6th-8th Fl., Yukol 2 Rd., Wat Debsirin, Pom Prap Sattru Phai, Bangkok 10100 Tel. : +662 299-3800 Fax. : +662 299-3801-2 5. Krung Thai IBJ Leasing Co., Ltd. Hire Purchase 10,000,000 4,899,998 49.00 2.00(2) Ordinary 161 Nantawan Bldg., 18th Fl., Rajadamri Rd., Lumpini, Pathumwan, Bangkok 10330 Tel. : +662 651-8120 Fax. : +662 254-6118 Credit Card/Personal Loan/Retail Loan 6. Krungthai Card Pcl. Credit Card and 2,578,334,070 1,270,908,500 49.29 - Ordinary 591 UBC II Bldg., 14th Fl., Sukhumvit Rd., Personal Loan Klong Ton Nua, Wattana, Bangkok 10110 Tel. : +662 123-5000 Fax. : +662 661-7721 Annual Report 2020 351

Shareholding Ratio Direct Holding of Shares Indirect Total Shares (1) Type of Company Type of Business Invested by the Bank Holding Issued Share No. of Shares Percentage of Percentage of Invested Shareholding Shareholding 7. KTC Nano, Co., Ltd. Nano Finance 5,000,000 1,247,500 24.95 75.05(3) Ordinary 591 UBC II Bldg., G Fl., Room G3, Sukhumvit Rd., Klong Ton Nua, Wattana, Bangkok 10110 Tel. : +662 123-5300 8. KTC Prepaid Co., Ltd. Payment Service 10,000,000 2,495,000 24.95 75.05(3) Ordinary 591 Samatchavanich 2 Bldg., G Fl., under Supervision Room 102, Sukhumvit Rd., Klong Ton Nua, Wattana, Bangkok 10110 Tel. : +662 828-5568 9. KTC Pico (Bangkok) Co., Ltd. Retail Loan 6,000,000 1,497,000 24.95 75.05(3) Ordinary 591 UBC II Bldg., G Fl., Room G4, Sukhumvit Rd., Klong Ton Nua, Wattana, Bangkok 10110 Tel. : +662 123-5300 10. KTC Pico (Chonburi) Co., Ltd. Retail Loan 1,000,000 - - 100.00(4) Ordinary 89/457 Moo 6, Bo Win, Si Racha, Chon Buri 11. KTC Pico (Pathum Thani) Co., Ltd. Retail Loan 1,000,000 - - 100.00(4) Ordinary 94 Future Park Rangsit, 2nd Fl., Paholyothin Rd., Prachathipat, Thanyaburi, Pathumthani 12. KTC Pico (Samut Prakan) Co., Ltd. Retail Loan 1,000,000 - - 100.00(4) Ordinary 200/63 Moo 1, Bang Sao Thong, Samut Prakan 13. KTC Pico (Samut Sakhon) Co., Ltd. Retail Loan 1,000,000 - - 100.00(4) Ordinary 322/90 Ekkachai Rd., Mahachai, Mueang Samut Sakhon, Samut Sakhon Securities / Holding Company 14. Krung Thai Asset Management Pcl. Asset 20,000,000 19,999,986 100.00 Ordinary 195 Empire Tower., 32nd Fl., South Sathorn Rd., Management Yannawa, Sathorn, Bangkok 10120 Tel. : +662 686-6100 Fax. : +662 670-0430 Notes : (1) Final shareholding ratio (2) Indirect shareholding through Krungthai Panich Insurance Pcl. (3) Indirect shareholding through Krungthai Card Pcl. (4) Indirect shareholding through KTC Pico (Bangkok) Co., Ltd. (5) Indirect shareholding through KTB Advisory Co., Ltd. 352

Shareholding Ratio Direct Holding of Shares Indirect Total Shares (1) Type of Company Type of Business Invested by the Bank Holding Issued Share No. of Shares Percentage of Percentage of Invested Shareholding Shareholding 15. Krungthai Zmico Securities Co.,Ltd. Securities 259,127,200 129,563,600 50.00 Ordinary 287 Liberty Square Bldg., 8th,15th-17th, 19th, 21th Fl., Silom Rd., Bang Rak, Bangkok 10500 Tel. : +662 695-5000 Fax : +662 695-5173 16. KTB Advisory Co., Ltd. Holding Company 30,000,000 22,799,999 76.00 24.00(3) Ordinary 35 Nana Nua Bldg., 5th Fl., Sukhumvit Rd., Klong Toey Nua, Wattana, Bangkok 10110 Tel. : +662 208-3047 Fax. : +662 256-8659 Supporting Business 17. KTB Law Co., Ltd. Legal Services 300,000 299,993 100.00 - Ordinary 191/50-53,55, 21 CTI Tower, 18th-19th, 27th Fl., Ratchadapisek Rd., Klong Toey, Bangkok 10110 Tel. : +662 096-8800 Fax. : +662 261-3748-50 18. KTB General Services and Security Co., Ltd. General Services 1,400,000 1,399,990 100.00 - Ordinary 96/12 Soi. Ladprao 106 (Boon-Udom 1), Ladprao Rd., Wang Thong Lang, Bangkok 10310 Tel. : +662 791-9800 Fax. : +662 935-3711 19. KTB Computer Services Co., Ltd. IT Services 13,000,000 12,999,994 100.00 - Ordinary 22/1 Sawai Brown 2 Bldg., Soi Sukhumvit 1, Sukhumvit Rd., Klong Toey Nua, Wattana, Bangkok 10110 Tel. : +662 646-8000 20. Infinitas by Krungthai Co., Ltd. Digital Platform 30,000,000 - - 100.00(5) Ordinary 944 Mitrtown Office Tower, 25-26th Fl., Service and Rama 4 Rd., Wangmai, Pathumwan, Services Related to Bangkok 10330 Technology Annual Report 2020 353

Shareholding Ratio Direct Holding of Shares Indirect Total Shares (1) Type of Company Type of Business Invested by the Bank Holding Issued Share No. of Shares Percentage of Percentage of Invested Shareholding Shareholding Others 21. National ITMX Co., Ltd. Interbank 500,000 99,295 19.86 - Ordinary 5/13 Moo 3, Klong Kluea, Pak Kret, Transaction Nonthaburi 11120 Management Tel : +662 558-7555 Fax. : +662 558-7566 22. BCI (Thailand) Co., Ltd. Electronic Letter of 53,000,000 11,750,000 22.17 - Ordinary 5/13 Moo 3, 4th Fl., Chaeng Watthana Rd., Guarantee Service Khlong Kluea, Pak Kret, Nonthaburi 11120 on Blockchain System 23. Suvarnabhumi Airport Hotel Co., Ltd. Hotel 10,177,800 1,017,780 10.00 - Ordinary 999 Moo 1 Suvarnabhumi Airport Hotel Bldg., Nongprue, Bang Phli, Samut Prakarn 10540 Tel. : +662 131-1042-4 Fax. : +662 131-1189 24. Saraburi New Industrial City Co., Ltd. Industrial Estate 25,000,000 2,500,000 10.00 - Ordinary 123 Thai Life Insurance Bldg., 12th Fl., Ratchadapisek Rd., Huaykwang, Bangkok 10400 Tel. : +662 246-9487 Fax. : +662 246-9819 25. Alphatec Electronics Pcl. Electronics 2,642 806 30.51 - Ordinary (Contact office of the liquidator) Components 889 Thai cc tower, 14th FL., North Sathorn Rd., Manufacturing Sathorn, Bangkok 10120 26. Manager Media Group Pcl. Publishing 129,354,620 20,814,928 16.09 - Ordinary 98/3-10 Phra-Athit Rd., Chana Songkram, Phra Nakorn, Bangkok 10200 Tel. : +662 629-4488 Fax. : +662 629-4469 27. Kuang Pei San Food Products Pcl. Producing and 500,489,990 62,145,000 12.42 - Ordinary 43 Tanasarn Tower, Chiangmai Rd., Selling Tinned Khlong San, Bangkok 10600 Foods Tel. : +662 863-3288 Fax. : +662 437-8123 Notes : (1) Final shareholding ratio (2) Indirect shareholding through Krungthai Panich Insurance Pcl. (3) Indirect shareholding through Krungthai Card Pcl. (4) Indirect shareholding through KTC Pico (Bangkok) Co., Ltd. (5) Indirect shareholding through KTB Advisory Co., Ltd. 354

Shareholding Ratio Direct Holding of Shares Indirect Total Shares (1) Type of Company Type of Business Invested by the Bank Holding Issued Share No. of Shares Percentage of Percentage of Invested Shareholding Shareholding 28. Sahaviriya Steel Industries Pcl. Steel Industries 11,113,018,280 4,499,394,589 40.49 - Ordinary 28/1 Prapawit Building, 2nd-3rd Fl., Surasak Rd., Bangrak, Silom, Bangkok 10500 Tel. : +662 238-3063-82 Fax : +662 236-8890, +662 236-8892 29. Private Equity Trust for SME Growing Private Fund 21,100,000 18,590,302.70 88.11 - Trust Together 1 (Fund established Certificate 989 Siam Piwat Tower Building, 9tth , 24th Fl., to promote small Rama I Rd., Pathumwan, Pathumwan, and medium-sized Bangkok, 10330 enterprises (SMEs) 30. Private Equity Trust for SME Growing Private Fund 70,940,000 60,892,696.86 85.84 - Trust Together 2 (Fund established Certificate 989 Siam Piwat Tower Building, 9tth , 24th Fl., to promote small Rama I Rd., Pathumwan, Pathumwan, and medium-sized Bangkok, 10330 enterprises (SMEs) Notes : (1) Final shareholding ratio (2) Indirect shareholding through Krungthai Panich Insurance Pcl. (3) Indirect shareholding through Krungthai Card Pcl. (4) Indirect shareholding through KTC Pico (Bangkok) Co., Ltd. (5) Indirect shareholding through KTB Advisory Co., Ltd. Annual Report 2020 355

4. Other References • Securities Registrar Thailand Securities Depository Co., Ltd. 93 Ratchadapisek Rd., Dindaeng, Bangkok 10400 Tel.: +662 009-9000 SET Contact Center: +662 009-9999 Fax. : +662 009-9991 E-mail : [email protected]

• Debenture Holder Agent and Debenture Registrar > Subordinated Instruments intended to qualify as Tier 2 Capital Krung Thai Bank Pcl. (Debenture Registrar) of Krungthai Bank PCL. No. 1/2017 (Redemption in 2027). The Registrar Team, Capital Market Service Department Subordinated Instruments are redeemable at the instance of 977/2 SM Tower, 3rd Fl., the issuer before the maturity date and can be written down Phahonyothin Rd,Samsen Nai, (fully or partially) after the official decided to offer financial aid. Phaya Thai, Bangkok 10400 Tel. : +662 298-0830-3 ext. 109, 130, 124 Fax. : +662 298-0835 > USD Debentures of KrungThai Bank PCL. No. 1/2018 Bank of Ayudhya Pcl. (Debenture Registrar) (Redemption in 2023). Securities Services Operations Department 1222 AA Fl., Rama III Rd., Bang Phongphang, Yan Nawa, Bangkok 10120 Tel. : +662 296-5715 Fax. : +662 683-1302 > Subordinated Instruments intended to qualify as Tier 2 Capital Krung Thai Bank Pcl. (Debenture Registrar) of Krungthai Bank PCL. No. 1/2019 (Redemption in 2029). The Registrar Team, Capital Market Service Department Subordinated Instruments are redeemable at the instance of 977/2 SM Tower, 3rd Fl., the issuer before the maturity date and can be written down Phahonyothin Rd,Samsen Nai, (fully or partially) after the official decided to offer financial aid. Phaya Thai, Bangkok 10400 Tel. : +662 298-0830-3 ext. 109, 130, 124 Fax. : +662 298-0835 • Auditor EY Office Co., Ltd. 193/136-137 Lake Ratchada Bldg., 33rd Fl. Ratchadaphisek Rd., Khlong Toei, Bangkok 10110 Tel. : +662 264-9090 Fax. : +662 264-0789-90 • Legal Advisors Legal Affairs Department, Compliance & Procedures Sector, Compliance & Legal Management Group Krung Thai Bank Pcl. 10 Sukhumvit Bldg.,17th Fl., Sukhumvit Rd., Klong Toey, Bangkok 10110 Tel. : +662 208-1770-79 KTB Law Co., Ltd. 191/50-53, 21 CTI Tower 18th-19th, 27th Fl., Ratchadapisek Rd., Klong Toey, Klong Toey, Bangkok 10110 Tel. : +662 261-3739 Fax. : +662 261-3748-50 356

5. Credit Ratings of the Bank

Dec 2020 Dec 2019 • S&P Global Ratings • Long-term/Short-term • Outlook BBB / A-2 BBB / A-2 • Stand-Alone Credit Profile (SACP) Watch Negative (2) Stable bb+ bb+ • Moody’s Investors Service • Long-term/Short-term Baa1 / P-2 Baa1 / P-2 • Outlook Stable Positive • Baseline Credit Assessment (BCA) baa3 baa3 • Fitch Ratings Foreign Currency Credit Ratings • Long-term/Short-term BBB / F2 BBB / F2 • Outlook Stable Positive • Viability Rating bbb- bbb- • Subordinated Debt (USD) -- (1) BBB- National Credit Ratings • Long-term/Short-term AA+ (tha) / F1+ (tha) AA+ (tha) / F1+ (tha) • Outlook Stable Stable • Unsubordinated Debt (USD) AA+ (tha) AA+ (tha) • Subordinated Debt AA- (tha) AA (tha)

(1) The Bank redeemed Subordinated Debt (USD) in December, 2019. (2) On August 24, 2020, the S&P Global Ratings classified credit rating of the Bank and the instruments as CreditWatch with negative implications.

On April 2, 2020, Fitch Ratings announced to “maintain” international foreign currency credit rating and national credit rating of the Bank by considering the challenges of the business environment and economic impact arising from the COVID-19 outbreak. The Bank, as one of five banks, was designated as the Domestic Systemically Important Banks (D-SIBs) by the BOT as well as a bank with strategic importance to the Thai government correspondingly. Nevertheless, the national credit rating of subordinated debt of the Bank was adjusted to 1 notch to AA- (tha), formerly AA (tha), according to the revised credit rating criteria of Fitch Ratings, affecting the national credit rating of subordinated debt. On August 24, 2020, S&P Global Ratings refered to the COVID-19 pandemic to have effects on the overall economy of Thailand, including causing the increase in credit risk of banks in Thailand. Therefore, S&P Global Ratings then announced the credit rating of the Bank and the instruments as CreditWatch with negative implications.

6. Other Major Information None Annual Report 2020 357

Banking Network as at December 31, 2020

Exchange Booths 187 1 6 46 Northeastern General Digital Service Booths Region Branches Branch Points

151 1 6 Northern General Digital Service Domestic Branches Region Branches Branch Points

976 General Branches 25 Digital Branches Centers 4 Service Points 74 44 Centers 151 8 Southern General Service International Branches Points Business Business Region Centers (IBC) Office Centers 94 5 Eastern General Service Region Branches Points

92 2 Central General Service (For more detail of domestic network and service hours, please Region Branches Points visit krungthai.com/en/contact-us/ktb-location or scan QR Code) 301 2 16 Note: Includinghead quarter and off-site banking services for more then 30 days. Bangkok General Digital Service & Vicinity Branches Branches Points

Contact Channels Retail Banking Complaints and Suggestions Krungthai Contact Center +662 111-1111 Krungthai Contact Center +662 111-1111 [email protected] Customer Complaint Center Krungthai Corporate P.O. Box 44 Hua Lam Pong Corporate (08:00 - 19:00 hrs.) +662 111-9999 Post Office Bangkok 10331 Government Sector (24 hrs.) +662 111-1144 [email protected] [email protected]

Krungthai Care 358

OVERSEAS OFFICES as at December 31, 2020

Kunming Branch Siem Reap Province Sub-Branch Overseas Branch Manager : Ms. Weeranee Tanasanvimol Overseas Branch Manager : Mr. Sakorn Jansamutr Address : 19th Floor, Shuncheng East Building, Address : 10-11, Sivatha Road, Mondol 2, No.11, Dongfeng Road (West), Khum Svay Dangkum Siem Reap District, Kunming, Yunnan, China, 650031 Siem Reap 17252, Cambodia Tel. : +86 (871) 6313-8370 Tel. : +855 (63) 964-758 Fax. : +86 (871) 6313-8367 Fax. : +855 (63) 964-759 SWIFT : KRTHTHBKKNM E-Mail : [email protected] E-Mail : [email protected] Singapore Branch Los Angeles International Branch FVP Overseas Branch Head : Mr. Pisit Buranakitpinyo Senior Manager-Credit : Mr. Ittisoonthorn Nuangyindee Address : 65 Chulia Street, OCBC Centre, & Acting GM 32-05/07, Singapore 049513 Address : 707 Wilshire Boulevard, Suite 3150 Tel. : +65 6533-6691 Los Angeles, CA. 90017, USA. Fax. : +65 6533-0930 Tel. : +1 (213) 488-9897, 488-9899 SWIFT : KRTHSGSG Fax. : +1 (213) 891-0733 E-Mail : [email protected] SWIFT : KRTHUS6L E-Mail : [email protected] Vientiane Branch Overseas Branch Manager : Mr. Chokchai Leelapattaraphan Mumbai Branch Address : 80 Lanexang Road, Ban Xiengyuen, General Manager : Mr. Gasinpong Kongrit Chanthabouly, Vientiane Capital Address : 6th Floor, 62 Maker Chambers VI, People’s Democratic Republic of Lao Nariman Point, Mumbai 400021, Tel. : +856 (21) 213-480, 222-761 India Fax. : +856 (21) 222-762 Tel. : +91 (22) 2287-3741, 2283-7693 E-Mail : [email protected] Fax. : +91 (22) 2287-3744 SWIFT : KRTHINBB Cayman Islands Branch E-Mail : [email protected] FVP Overseas Branch Head : Mr. Wittaya Archewaparisut Address : 5th Floor, Harbour Place, Phnom Penh Branch 103 South Church Street, P.O. Box 1353, Senior Overseas Branch : Mr. Watcharapong Sompong George Town, Grand Cayman KY1-1108 Manager E-Mail : [email protected] Address : 149, Street 215, Sangkat phsar Depo 1, Khan Toulkok, Phnom Penh 12153, Yangon Representative Office Cambodia Senior Manager, : Mr. Wutichai Sermsongsakunchai Tel. : +855 (23) 882-959, 883-720 Representative Office Fax. : +855 (23) 883-719 Address : Centre Point Tower, 7th Floor, SWIFT : KRTHTHBKPMP No.65, Corner of Sule Pagoda Road and E-Mail : [email protected] Merchant Street, Kyauktada Township, 11182, Yangon, Myanmar Tel. : +95-9-420 277 056, +95-1-243 186 E-Mail : [email protected], [email protected] This Annual Report is

Printed with the Printed on a environmentally Green Plus paper friendly soy ink. to reduce energy usage and care for the environment.

This Annual Report 2020 contains forward-looking statements concerning analysis and other information (as well as the Bank’s prospects, plans and business strategies).The Bank has based those forward-looking statements on the current view of the Bank with respect to future events, but it does not guarantee future results. The actual results in the future may differ materially from those anticipated in this report. Investors should consider the information carefully and must not place undue reliance on the forward-looking statements.

Hence, investors are cautioned to be particularly careful and exercise individual judgement in studying the Bank’s information stated in this report.

Produced by Designed and Printed by Business Risk and Macro Research Team 21 Century Co., Ltd. Global Business Development and Strategy Tel: +662 150-9676-7 Group Krungthai Bank Growing Together

35 Sukhumvit Road, Klong Toey Nua Subdistrict, Wattana District, Bangkok 10110 Tel: +662 255-2222 Fax: +662 255-9391-3 Krungthai Contact Center: +662 111-1111 Corporate Call Center: +662 111-9999 krungthai.com SWIFT: KRTHTHBK

Krungthai Care